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Thursday, February 21, 2013
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Funding Padma Bridge

New KL offer too costly

Malaysian Exim Bank to provide loan at 5pc interest

The Exim Bank of Malaysia would finance the Padma bridge project, said Malaysia in a new proposal yesterday. However, the cost and interest rate on the credit are much higher than those of the World Bank-led financiers.

A visiting Malaysian team led by the country's prime minister's special envoy Dato Seri S Samy Vellu yesterday presented their proposal at a meeting with Finance Minister AMA Muhith at the latter's office.

Officials present in the meeting said the interest rate on Exim Bank's loan was around 5 percent. The estimated cost of the project components -- the main bridge construction, river training and yard construction -- are also much more than the earlier estimate made by the government.

The interest rate on the now-cancelled loan from WB-led financiers was below 1 percent.

Many works of the Padma bridge project like land acquisition, resettlement, and construction of approach roads are in progress. The estimated cost presented by the Malaysian team is exclusive of these costs.

The Malaysian team yesterday made component-wise presentation on the bridge construction while the Bangladesh side sought clarifications on various issues.

The delegation will today hold further meeting in this regard with Communications Minister Obaidul Quader. After detailed discussion, the proposal will be sent to Prime Minister Sheikh Hasina, said official sources.

The finance minister yesterday held a series of meetings on the Malaysian proposal.

Meanwhile, before the talks with the Malaysian delegation a high level meeting was held where the communications minister, foreign minister, labour and overseas employment minister, prime minister's international affairs adviser, Bangladesh Bank governor and secretaries of concerned ministries were present.

Former vice chancellor of Brac University Prof Jamilur Reza Chowdhury and its incumbent VC Ainun Nishat were also present in the meeting. The duo was also present during the presentation of the Malaysian team.

Later, the finance minister held a closed door meeting with Prof Chowdhury and Prof Nishat.

Official sources said there were differences of opinion within the government regarding the Malaysian proposal.

At the minister-level meeting the Bridges Division voiced in favour of the Malaysian proposal while most of the other attendees favoured constructing the bridge with own resources.

Even Prof Chowdhury and Prof Nishat spoke in favour of the latter opinion.

However, neither the finance minister nor the communications minister told anything about what happened in the meeting.

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Bangladesh should try with it's own resource to build the bridge. Rail track should be dropped from the project and that'll substantially reduce the cost.

: Sayed A Huq

Now it is quite clear that what a blunder the government has made by withdrawing its loan proposal from WB. The future of the Padma bridge is now at a stake. It will too costly to finance the bridge by foreign finance other than WB. As regards own funding will be very difficult to mobilise resources setting aside other development programmes. The government should find out alternative source of funding.

: suahmed


  • Abdullah
    Thursday, February 21, 2013 11:45 AM GMT+06:00 (155 weeks ago)

    Look, since the government does not have the resource to build the bridge, they wish to get money from investors. No investor is going to give 1.2 billion dollars with a low interest rate. People should take into account that the investors also risk their money by loaning it to someone. An interest rate of 5% seems fine. World Bank agrees to loan money at 1.7% interest because in the contract they have other terms and conditions. When you borrow something from someone you cant always want it to be in your favour.

  • Jumana Sarwar
    Thursday, February 21, 2013 07:05 AM GMT+06:00 (155 weeks ago)

    The deal is costly, so what, we can afford to take that loss after all our patriots are more valuable than this loss.





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