Friday, September 21, 2012

Padma episode weakened our position: Economists

Though the World Bank has finally agreed to revive its funding for the much-hyped Padma Bridge project, economists say this Padma episode has weakened Bangladesh’s position and the accountability issue will apparently become more important for any future foreign-aided project.

They, however, said it needs to be ensured so that this mega project does not face further delay due to investigation into the so-called graft.

“We’ve made ourselves weak a bit with the Padma Bridge story. Question has been raised about public management, capability and capacity,” eminent economist and distinguished fellow of Centre for Policy Dialogue (CPD) Debapriya Bhattacharya told the media while making comments on the World Bank’s return to the important project.

He said: “The issue of accountability for any future project, not only the World Bank-ones, any project of Japan (Jica- Japan International Cooperation Agency) and the Asian Development Bank (ADB), will be more important.”

On the fresh conditions set by the World Bank, Debapriya said, “The international expert panel will work with the Anti Corruption Commission to look into the alleged graft, and will have to wait for the outcome. But it’s important that the investigation process should not hamper the implementation of the project.”

Noted economist and former caretaker government adviser AB Mirza Azizul Islam said it should be cleared who will be there in the external panel. “What will be the composition of the external panel? needs to be determined quickly to know who are from the country and who are from outside.”

About the WB’s return, Prof Anu Mohammad said the World Bank is always interested to provide loan to countries like Bangladesh. “If a country like Bangladesh stops taking loan from the World Bank, then it’ll collapse. Bangladesh will also face trouble in the future while negotiating on any project.”

Meanwhile, different quarters, including the main opposition BNP expressed happiness and welcomed the WB’s return to the Padma Bridge project.

“We had earlier said we want construction of the Padma Bridge. We had also said it’s not possible to build the bridge without the World Bank loan. We’ll be happy if the World Bank reviews its decision,” BNP spokesman Mirza Fakhrul Islam Alamgir said.

Fakhrul, also the BNP’s acting secretary general, said had the government taken measures as per the letters sent by the global lending agency the 10 months would not have wasted. “The government will have to answer why it had failed to take action 10 months ago.”

Awami League senior leader Tofail Ahmed said all should proceed with a positive attitude on national issues. “Padma Bridge is a bridge for all. No one should have negative attitude towards it.”

The government is expected to come up with its official reaction to the WB’s decision by Saturday or Sunday, sources at the Finance Ministry said.

Earlier, in a statement, the World Bank said, “The Bank has agreed that, upon satisfactory implementation of the agreed measures by the government, and with the support of the Bank's governing bodies, the Bank will engage anew in the Padma Multipurpose Bridge.”

The release said in its communication with the World Bank about the fulfillment of these measures, the government of Bangladesh requested the World Bank to consider again the financing of the Padma Multipurpose Bridge.

The World Bank, the lead co-financer of the Padma Bridge project, cancelled its committed $1.20 billion loan on June 29. Since then, the government has been trying to convince the global lender for revival of its fund it cancelled on the allegation of corruption in the selection process of consultant for building the 6.15-km-long bridge.

The government undertook the Padma Bridge project in August 2007 estimating the cost then at $1.40 billion (Tk 101.62 billion). The project cost was revised upward to $2.9 billion because of the rising costs of construction materials and foreign currency fluctuations.

Later, the lenders -- the WB, the Asian Development Bank (ADB) and the Japan International Cooperation Agency (Jica) -- made separate commitments to provide an aggregate amount of $2.35 billion as credits to build the bridge.

Though the WB cancelled the loan, the ADB and the Jica extended the loan effectiveness for the first time on July 31 by one month to August 31. Later, the ADB and extended the loan effectuation timeline by a month for the second time while Jica by three weeks from September 1.

The two major lenders have also asked the government to settle the matter with the WB within the timeframe before getting their committed funds for the Padma Bridge project.

The Manila-based ADB had earlier committed $615 million, Jica $400 million and the Jeddah-based Islamic Development Bank $140 million in loans for building the bridge.