Wednesday, February 15, 2012

The curious case of Padma Bridge

We need a bridge over the Padma river and the government is going to build it soon. This statement or something to this effect has been circulating since the time of the Ershad regime which ended in 1990. Since then all other governments also talked of the bridge, which finally everyone thought is going to be materialised this time. 

But now a question mark hangs over the bridge again.

What is more curious is the way things unfolded. Since the current government came to power, the bridge concept moved quite fast. Multilateral and bilateral agencies started showing concrete interest in the project. And finally funds were firmed up. 

From there everything fell apart. And various curious statements were made and actions taken, many of which raised serious concerns. 

Construction of the bridge was supposed to start sometime around last October. But then the World Bank's vice-president made a sudden trip to Dhaka and met Prime Minister Sheikh Hasina to convey that the bank has evidence of corruption in appointing a Canadian consulting firm. A month later the bank wrote to the government about corruption in selecting pre-qualified bidders for the bridge construction. Then former communications minister Syed Abul Hossain's name came up in the scam. 

After some initial defensive statements, the government asked the Anti-corruption Commission (ACC) to probe the alleged corruption. The commission, not unexpectedly, gave a clean chit to Abul. Now the government has a paper to wave claiming its innocence. And in the middle of it, the Canadian connection was forgotten, or rather deliberately set aside. 

Only from time to time, the bank has been saying its funding decision has been suspended pending an investigation by the Canadian police of the alleged corruption relating to the consulting agency. 

And then a curious statement was made by the prime minister who said the government will not accept any fund from the World Bank if it cannot prove corruption in the bridge project. The statement is perplexing because it can only mean that we will accept fund from the bank only if corruption is proven. There lies the hilarity of the prime minister's proposition. A pertinent question can be: will the bank provide fund if corruption is proven? Or more fundamentally, is the bank eager to give us the fund, and we are the ones who are being picky? Or is the government just setting the escape route in case the Canadian police unearth something fishy?

The other actions by the government also make the Padma Bridge case curious. While the government kept on denying foul play in the bridge affair, it looked for alternative sources of fund. And Malaysia came to the rescue, offering to build the bridge. The government touted the Malaysian offer as a triumph over the World Bank. Very curiously, it was propagated that the work of the bridge will begin in April although there was no clear cut idea where the money was coming from. And even plans for restaurants, shops and entertainment facilities were laid out. And now we know the Malaysian deal is not on track, and the work is not starting in April. So who the government is trying to fool? The government itself is losing face, again and again, by its own actions.

But even if the Malaysian deal could be pulled off, what would be the cost? The World Bank's fund would come with an interest rate of 0.85 percent. And nobody knows how costly would the Malaysian fund be. It is now clear that Malaysian firms have no financial muscle (interestingly the firms which are supposed to do the job have not been selected yet). They want to raise funds from financiers in Dubai. So it would be a commercial loan at a high interest rate not less than 8 percent or may be even higher because of the high inflation regime. So for whose fault would we, the taxpayers, bear that huge extra cost for the bridge? Or rather why should we pay so much extra money for the actions of the government? 

The whole Padma Bridge affair now needs transparency as public money is involved here. First we need to know from the World Bank what exactly its findings are. The bank itself is acting funny by keeping things under the rug. The government said there cannot be any corruption because contracts were not signed. True. Then what proof does the bank have? Abul Hossain's alleged involvement in the alleged corruption has been well publicised. But what about the Canadian firm? Why so little has been said about it? 

It is time we solve the curious case of the bridge.