Third eye A bridge over troubled waters

I was on vacation. Michael Jackson had just died. My ten-year-old son was singing: “I’m bad.” It seems in today’s Bangladesh, I should also be singing only that song. I have already become the “odd man out,” because of the challenges I pose to the established myths or regulatory behaviour. My only consolation is maybe others can’t see what I can.

A few of us were always critical about building Padma Bridge with our own resources. It was not because we are short of resources. It was more for maintaining compliance with the international building codes or standards, project supervision, attracting the best contractor to build the world class bridge, smooth management of relocation and rehabilitation programs, and most importantly, maintaining financial discipline.

We never doubted that a nation that earns Tk1.8 trillion in revenues and spends an excess of Tk2.5 trillion per annum can of course build a number of bridges like the one over the Padma with its own resources. If we could achieve independence at the cost of more than 3 million valuable lives, we can surely accomplish many “missions impossible.”

But one could easily raise the question: Do we really need a Padma Bridge to be built at any cost? In doing so, should we push the macro-economy, which is already showing some signals of  stress and strain, into further trouble?

Or divert funds from “large infrastructure projects,” social safety net programs, education, rural health infrastructure, the Dhaka-Chittagong dedicated trade corridor, Chittagong port modernisation, conversion of Dhaka-Chittagong  or Dhaka-Mymensingh highways into four-lanes, and improvement of rail and river routes?

The bridge may be very important for the ruling party legislators from the country’s southwestern regions, but not for their friends in Chittagong, Noakhali, Sylhet, Comilla, or even Rajshahi and Dinajpur. The bridge may play a large role in improving connectivity within the country or even region, but our entrepreneurs need a more functional Chittagong port or reduction in transportation time to take goods to the port.

The cabinet the other day decided to establish a medical college in Rangamati. I was so happy to hear this. I would also be very happy if they decided to build a medical college in Narayanganj, adjacent to the large medical hospital they have there. I would be most happy to see the Bangladesh Institute of Management in Dhanmondi be converted into a world class management institute with the help of IIMs in India or under an affiliation with one of them. We need to fix these things first.

There has been news regarding the signing of the Padma Bridge construction contract with China Major Bridge Construction and Engineering Company under a budget of Tk121.3bn. The Ministry of Finance has already added another half a billion dollars to the estimated cost for building the bridge and associated expenditure considering the possible cost overrun.

Despite a lot of good wishes, there seems to be no “easy arithmetic” as far as mobilising such a huge volume of resources is concerned. The time-factor for its implementation will also be a critical issue. Many other estimates including the toll fixing and receivable numbers need to be re-casted. Funds for the project will be largely required to be spent in foreign exchange. The domestic financing of the project is also likely to have implications on macro-economic management, prices, execution capacity, technical safeguard, development activities, as well as diversion of funds to the resources – hungry sectors of the economy, operations of financial sector, public debt management etc.

All these factors will have to be taken care of in order to safeguard the economy and ensure project implementation with precision. When I look at our commanders responsible for implementing the Padma Bridge, for some reason I don’t feel very confident. They seem to be in a hurry without much preparation or fair feasibility about their destination. I am not sure they have done their homework well.

The issues being raised here are not to question the merit of the decision about the execution of the Padma Bridge project under domestic financing. Rather, more dependence on domestic resources for meeting the financing needs of investment-related development activities should always be considered thoughtful. But affordability and capacity of the economy and its players obviously need to be examined properly before venturing into a massive and cost-intensive project like Padma Bridge.

China should be happy today. So should our government for getting China on their side to tide over the political mess. But political considerations bypassing economic prudence may strain the nation in future.