A Chinese consortium, backed by a government-owned bank, has officially proposed to channel $1.95 billion to bridge the Padma without interest and a payback period of 20 years.
It says the dream bridge connecting the capital with the southern and the south-western Bangladesh will complete in just three years.
The offer has estimated the cost of Bangladesh’s largest ever infrastructure project at $2.79 billion. A previous agreement with the World Bank had put the cost at $2.9 billion.
According to the latest proposal by the Chinese, Bangladesh will have to source the rest of the money – roughly 30 percent of the total spending – and appoint a firm to supervise the construction work. The fees for that firm will have to be paid by the government.
Bangladesh would require repaying $8.15 million a month for 20 years after an agreement is signed for the 6.15-kilometer multipurpose road-rail bridge.
Estimates have it that the bridge would boost the nation’s economic growth by up to one percent a year.
Under a consortium arrangement, the China Development Bank (CDB) would give the money with Sphere Energy Creations Beijing Ltd (SECA) being the lead agency, the proposal says.
It says the consortium would have the liberty of appointing contractors of its own choice for building the bridge if Bangladesh takes the fund it has offered. The Chinese will execute the construction, it says.
Amid uncertainty over whether the administration of Prime Minister Sheikh Hasina would be able to start constructing the bridge before her five-year term expires later this year, the proposal could be seen as important, especially with the widely-held view in the government that a similar offer by Malaysia could be too expensive.
The ambitious scheme ran into deep trouble after the government in last January refused to continue bargaining with the World Bank for its $1.2 billion promised credit amid allegations of a “corruption conspiracy” involving Bangladeshi officials and executives of a Canadian construction giant, SNC Lavalin.
After the government ended the one-year long imbroglio with the Washington-based lender, co-financers Asian Development Bank (ADB) and Japan International Corporation Agency (JICA) also backed out of the project because of their obligation to follow in the footsteps of the lead donor in the project.
The ADB had committed $610 million in loans, Jeddah-based Islamic Development Bank $140 million and the Japan International Cooperation Agency $400 million with the rest of the finance coming from Bangladesh government.
While the government still sticks to its plan to start the massive construction with its own fund, Finance Minister AMA Muhith, speaking to bdnews24.com, says he considers the Chinese proposal “better” than the one by the Malaysians.
Even though the minister prefers the Chinese proposal, he is still optimistic that Bangladesh would be able to build the bridge with its own fund.
“We are making progress on that plan,” Muhith told bdnews24.com Tuesday. “I have spoken on the matter in Parliament. We will soon call tender for the bridge.”
The Finance Minister added: “We are not thinking of any other option at the moment.”
The proposal from the Chinese that landed at the Prime Minister’s desk last month says the lead agency SECA’s affiliates Sphere Energy Technology Beijing Limited and Sphere Energy Creations Australia Private Limited would be part of the consortium.
State-owned China Communications Construction Company (CCC), CREC 14th Bureau and CDGD are the other partners of the planned consortium.
SECA’s Executive Director Stephen Chong made the proposal in a letter to Hasina on Feb 25. The proposal envisages ‘a complete’ finance and construction option.
On Jul 12 last year, Chong had written to Economic Relations Division (ERD) and Bridges Division Secretaries expressing interest to bankroll the bridge.
Later on Sept 15, Minister Muhith and senior Bangladesh officials, while attending a meeting in Beijing, heard senior managers of the consortium companies.
The Feb 25 proposal to the Prime Minister referred to the two letters written to those Secretaries.
It promises building the bridge within three years and without changing the previous design in line with the original project plan.
Unlike Malaysia’s proposal, China said Bangladesh will fix toll rates for the bridge.
Earlier this month, Malaysia formally offered to invest $2.3 billion for get the project up and running.
Source: bdnews24
