Padma Bridge Saga

by Barrister Harun ur Rashid | October 1, 2012 5:33 pm

On September 21 the World Bank (WB) at a press release revived the $1.2 billion loan on the Padma Bridge project after the government fulfilled all the conditions. After the cancellation of the loan, the revival is a rarity in WB’s history. It was revived because both sides were able to grasp realities on the ground to come to an understanding to facilitate the bridge project.

The WB is not an ordinary bank and its proper name is “International Bank for Reconstruction and Development” and the Bank has a unique responsibility of lifting billions of inhabitants of the world’s poor countries out of poverty. Bangladesh is a Least –Developed Country and is the eighth largest country by population.

Given the above background, the WB cannot but re-consider the loan when all the conditions of the WB have been met by the government. If it did not, it would go against its charter of duties.

At the same time, the Bangladesh government came to the view that the best option is to seek soft loan from the WB for the bridge and it had to fulfill all the conditions.

It may be recalled that WB approved loan on February 24, 2011 and the government signed a loan agreement on April 28. . In August, the WB raised corruption allegation. The government rejected graft allegations of the WB and no actions as suggested by the WB were taken. WB suspended the loan on September 13 of that year.

After September, there was a tug of war of words through exchanges of letters between the two sides for eight months and it proved futile for the government to convince the WB to lift suspension of the loan.

In June 2012 intense negotiations started between the government and the WB. The WB set four conditions and one of them was to place all public officials including a Minister and PM’s adviser on leave from government until the investigation was completed. The government did not act with regard to the Minister and the Adviser and on 29th June the WB cancelled the loan.

Following the cancellation, reactions from some senior government leaders were found to be unfortunate as they were playing to the gallery and even were alleging corrupt practices of the WB. . The whole scenario was made to the public as if it was a case of prestige of Bangladesh vs WB. In fact Bangladesh is a member of the WB and has an alternate director with the WB.

Furthermore some of the government leaders considered the idea of building the bridge on its fund or even with costly Malaysian option, thus sending confusing signals to donor- agencies including the WB as to whether Bangladesh government needed the loan from the WB.

The Finance Minister A. M. A. Muhith must be credited to have realised that it was not the only case of cancellation of loan per se that was at stake. Greater stake was the reputation of the government at WB’s allegation of “a high-level corruption conspiracy” to development partners and donor agencies. He was determined against all odds to revive the loan and thus restore the reputation of the government by complying with all conditions.

The Finance Minister invested his valuable time and energy to put all his efforts to prevail upon the government to fulfill all conditions, especially persuading the economic adviser to take leave. The Adviser took leave only on 17th September.

Professor Gowher Rizvi, PM’s Adviser on International Affairs, left Dhaka for Washington on 16th evening with the letter of leave and submitted to the WB, thus complying with all the conditions.

Both the Finance Minister and the PM Adviser Rizvi must be commended for their hard work in reviving the loan for the dream Padma Bridge project.

It is noted the Prime Minister saw the need of putting the country above individuals to fulfill one of the core conditions of her election pledges, thus strengthening the base support of her party in the coming election in the 21 south and western districts because the bridge will contribute significantly towards facilitating the social, economic and industrial development of the region with a population of about 50 million. The bridge is also a vital component to put Bangladesh as middle-income country by 2021

To fulfill the conditions of the WB, the Prime Minister had agreed to lose one cabinet minister and her economic adviser with ministerial rank (one resigned and the other took leave)

The Padma Bridge is a multipurpose road-rail bridge of 6.15 km across the Padma River.
Out of the total cost of the project (about $3 billion), it is estimated that about $2.1 billion will be injected into the economy and the rest consists of imports and consultancy.

A big project with $3 billion dollar will not only have multiplier effects on the economy but also will a huge mood lifter for people of Bangladesh. Some economists believe that by facilitating transportation across the river, the Padma Bridge will lead to the greater integration of regional markets within the Bangladeshi national economy. GDP growth is expected be increased between 1.5-2%.

Corruption is an evil phenomenon and exists in all countries—big and small, poor and rich—but it is in the developing world that its effects are most destructive because it hurts the poor disproportionately. What the WB wanted was a full and fair investigation of the corruption allegation under Bangladesh’s law and ACC is now ready to work with the WB’s panel of experts.

In future whenever any corruption allegation is raised, the government will have to take responsibility for promptly conducting full and fair investigation to ascertain the truth. This is more so because Bangladesh is a party the UN Convention Against Corruption since 2007.

Since almost one year has been lost , the people of Bangladesh expect that both parties implement the construction of the bridge with minimum procedural delays.

By Barrister Harun ur Rashid
Former Bangladesh Ambassador to the UN, Geneva

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