1
An Assignment on
Padma Bridge: WB’s views, government initiatives &good governance.
Prepared by Rabioul Aual Robel student of Dhaka University, dept. ofIR
1. Introduction: The Padma Bridge is a multipurpose road-rail bridge across the
Padma River to be constructed in Bangladesh. When completed it
will be the largest bridge in Bangladesh and the first fixed
river crossing for road traffic. It will connect Louhajong,
Munshiganj to Shariatpur and Madaripur, linking the south-west of
the country, to northern and eastern regions. The project will
include 6.15 km long and 21.10 m wide bridge, 15.1 km of approach
roads, toll plazas and service areas. The bridge will contribute
significantly towards facilitating the social, economic and
industrial development of this relatively underdeveloped region
with a population of over 30 million. The area of influence of
the direct benefit of the project is about 44,000 km2 or 29% of
the total area of Bangladesh. Therefore, the project is viewed as
very important infrastructure towards improving the
transportation network and regional economic development of the
country. The bridge has provisions for rail, gas, electric line
and fiber optic cable for future expansion. . In this term paper
I discussed the importance of Padma Bridge in Bangladesh context
2
& also discuss the following questions for conducting my term
paper.
The central research questions are-
Why WB’s loan is important in Padma bridge project?
Why good governance fail in Padma bridge project?
What measures should be taken to revive WB’s loan policy ?
Figure 1: Padma Bridge.
2. Padma Bridge:
2.1 Location:
The Projected area is located in the south-central part
(Munshiganj, Shariatpur, and Madaripur Districts) of Bangladesh.
The left bank (north bank) on Mawa side is located in Lauhajang
upazila of Munshiganj District whereas the right bank (south bank)
3
on Janjira side located in the Janjira upazila of Shariatpur
District and Shibchar upazila of Madaripur District.1
Alternatives for Project Location: Feasibility Study has identified
following four possible sites for the bridge construction and
recommended Site 3: Mawa – Janira as the preferred alignment but
their also other alternatives side & these are:
Site 1: Paturia – Goalundo
Site 2: Dohar – Charbhadrasan
Site 4: Chandpur – Bhedarganj
Figure: location of Padma Bridge.
2.2 Funding procedure:
1 Maunsell/AECOM New Zealand Limited,, “Padma Multipurpose Bridge Design Project”, Document Number: 60097044-REP-1C -00-SC-038 Rev1, June 30, 2010 , pp: 7, http://www2.adb.org/Documents/RRPs/.../35049-01-ban-oth-01.pdf.
4
The total cost for construction of Padma Bridge has estimated US$
2.9 billion. The total cost is provided by:
The world bank-$1200 million
Asian development bank(ADB)-615 million
Japan international cooperation agency(JICA)-415 million
Islamic development bank(IDB)-140 million
Bangladesh government-50 million
The government also signed another $14.84 million agreement with
the IDB for the implementation of the water-supply and sanitation
project in cyclone-prone coastal areas, and Abu Dhabi Development
Group $30 million.
WB ADB JICA IDB BD govt0
200
400
600
800
1000
1200
1400
1200
515 415140 50
Series 3
Figure: Donor's contributions in Padma Bridge (USD)
5
2.3 Construction:
One of the manifestations of present government (Awami league) is
to construct Padma Bridge. The Bridge will provide a vital
missing link in the national road network of Bangladesh,
particularly for the southwest part of the country. The bridge is
designed to be an approximately 6.15 km long fixed crossing
double deck composite steel truss bridge over the Padma river
with provisions for four lane highway on the upper deck, and a
rail line, gas pipeline, optic fiber cable and power transmission
lines on the lower deck. August 20, 2007: An ECNEC meeting headed
by Fakhruddin approves thr Padma bridge project with a cost
estimation of taka 10161 crore but in january11, 2011 ECNEC
revised the project & approve take 20507 crore for crore for the
project. Awami league government wanted to begin the project in
2011 but it is stopped because of cancellation WB’s of 1.2
billion loan (The WB had cancelled its $1.2 billion credit for
the Padma bridge project on June 29). In 25 sept 2012 WB revised
its policy & gives conditions to get loan. Government approves
these conditions & hopes that Padma Bridge will start on April-
may 2013. 2
2 Probir Bidhan, “The WB, Padma bridge & Abul Hossain”, ebangladesh desk, July 26, ,2012 http:// www.ebangladesh.com/.../timeline-the-wb-padma-bridge
6
3. Padma Bridge & WB:
3.1 WB’s contribution:
The World Bank is established to provide loan to developing
countries at lower interest rate. WB mainly gives loan to reduce
poverty & infrastructural development. From our independence WB
is part & parcel of our development process. It gives loan to our
infrastructural development it had contributed to construct
Jamuna Bridge & also wants to contribute Padma Bridge. In Padma
bridge project (February 2011) The WB board approves the $1.2
billion financing out of a total cost of $2.9 billion. It
contributes half of the total project at a lower interest rate.
The World Bank was supposed to provide $1.2 billion at an
interest rate of 0.75 percent to be repaid in 40 years with a 10
year grace period. If the normal loan amortization schedule
applied, the government would have had to pay $249 million in
interest in 40 years. This interest is very low in contrast to
other proposal. For this WB’s contribution is very important.
3.2 WB’s conditions:
Early June 2012 in a letter to Prime Minister Sheikh Hasina, WB
Vice President Isabel Guerrer gives the government “five
conditions” to take to get WB funding for the massive project.
The conditions are:
7
A high-powered investigation team has to be formed to
probe the corruption allegations in the project.
An independent firm has to be appointed to monitor
implementation of the project.
The independent firm will not be under the government or
any co-financier of the bridge project. It will make its
recommendations independently, and the authorities
concerned will implement those. The persons against whom
there are allegations of corruption regarding the bridge
project would not be in its implementation.
The co-financiers will have to be actively involved in the
procurement process for the bridge.
As a long term step, the government will take initiative
to increase the capacity of the ACC.3
3.3 WB’s policy about Padma Bridge:
Because of corruption WB adopted structural adjustment policy in
1980. Under this policy WB raised strong policy against
corruption. Under this policy in February 2011, The WB board
approves the $1.2 billion financing out of a total cost of $2.9
billion. But WB cancelled its loan because of corruption. In
September 21, 2011: The WB sends a letter to the finance
minister alleging that then the communications minister Syed Abul
Hossain and high officials of SAHCO had pressed for the
3 Probir Bidhan, ,“The WB, Padma bridge & Abul Hossain”, ebangladesh desk,june12,2012, http:// www.ebangladesh.com/.../timeline-the-wb-padma-bridge.
8
appointment of SAHCO as a “commission agent” regarding the
selection of contractors’ pre-qualification for the main bridge’s
construction. The lender also suspends financing. WB request RCMP
to investigate against SNC –lavalin & by investigation they see
the presence of corruption in this project. After that a long
time bargaining WB decides to re-engage in this project & gives
strict policies & tells to the govt to implement these policies.
Policies are-
to place all public officials suspected of involvement in thecorruption scheme on leave from government employment until aninvestigation is complete;
to appoint a special inquiry and prosecution team within the
ACC to handle the investigation; and
To grant access to all investigative information to an external
panel of internationally recognized experts who will advise the
Bank and co-financiers on the credibility of the government’s
investigations.
4. World Bank & Bangladesh government:
4.1 WB-Bangladesh Relations:
Bangladesh has been maintaining a congenial relationship with the
World Bank (WB) for more than 40 years as this institution started
financing different development programmes in this region even before
the emergence of Bangladesh. Bangladesh became a member of the World
Bank in 1972 and till June 2012, it received US$ 16.80 billion as
financial assistance from the Bank. Bangladesh received US$ 3.10
9
billion from the Bank in FY 2011 which was the highest quantum of
assistance for any particular year. Currently, the World Bank is
financing 41 projects/programs worth US$ 4.23 billion. These
projects/programmes are at various stages of implementation.
Bangladesh also received commitments for US$ 1.55 billion from the
World Bank in FY2012. In fact, the World Bank is the largest financier
among the development partners. In this long journey with the World
Bank, the government had differences of opinion, but, eventually it
found the Bank a progressive and close associate. At times, the World
Bank did not approve procurement or expenditure proposals for
different projects and also decreased or increased their level of
assistance to different projects. The cancellation of the loan may
have some long term impact on relations between Bangladesh and the
World Bank.4
4.2 Why Bangladesh government urge to World Bank?
This is important to question that why Bangladesh government urge
to WB, as WB is doing more harm than good for the developing
countries? Bangladesh, a developing country, is always choice WB
for infrastructural development. Bangladesh takes support from WB
because the World Bank has been Bangladesh’s development partner
since our independence. It provides a major part of funds for our
annual development programs. Most of our major development
4 AKM Moinuddin, , “Padma Bridge: A shattered dream?”, Dhaka courier, Vol 29,
26 October2012 ,http:// http://www.dhakacourier.com.bd
10
projects carried out in last forty years was spearheaded by the
bank.
The financial assistance that comes from the World Bank is
actually funded by the international development agency (IDA),
the low-cost financing arm of the World Bank group. The financial
assistance, called credit, bears on interest & is repayable over
30-40 years. Each credit has a small commitment fee. IDA credits
are available to low-income countries of the world. Bangladesh is
among fifty or low-income countries that currently receive this
type of assistance. The World Bank assistance for Padma Bridge
was also a noninterest credit (.75%) for $1.2 billion. A major
fallout of this cancellation is that we have to seek an
alternative source, but at a higher cost. If we could get the
loans from the donors, the country would have had to pay $505
million. But if we have to get commercial loans, the interest
amount would be $ 4.4 billion. This is why Bangladesh government
is always urging to WB loans.
4.3 Bangladesh government policy about Padma Bridge project:
11
The present government’s electoral pledge embodied in a vision of
Bangladesh is to achieve the status of middle income country. One
of the five strategic components of the government’s election
manifesto was a very uncompromising stance against corruption.
Present government’s one most committeemen is to begin the Padma
bridge project. The government want start its construction in
2011 but it is stopped because of cancellation WB’s loan. WB
cancels its loan because of corruption. The World Bank has
credible evidence corroborated by a variety of sources which
points to a high-level corruption conspiracy among Bangladeshi
government officials, SNC Lavalin executives, and private
individuals in connection with the Padma Multipurpose Bridge
Project. As present government’s most important manifestation is
to stand against corruption, so government must have clear cut
policy about Padma bridge project & the policies are-
Uncompromising stance against corruption backed by over a
dozen specific pledges to build capacity to control this
menace.
As WB told about corruption so the government should form
trusty board to investigate corruption.
To conduct of a full and fair investigation into evidence
of corruption.
As the bridge has the potential to accelerate growth and
transform lives in Southwest Bangladesh and across the
nation. So government must not give interest of many to
protect the interest of few.
12
The WB for its part allowed itself to take a controversial
decision and miss the opportunity to continue to engage
with the government to assist the investigation process,
and keep the credit open parallel with the investigation
process.
Implement all conditions given by WB & work together with
WB.
Assures to give all types of facilities to ACC commission
independently to investigate corruption.
Provide all kinds of facilities to WB team.
Bangladesh government should revive its policies as soon as
possible because WB revives its loan policy but they do not
assure to grant loan. Grant of loan mainly depends on the
positive report of the WB investigation team. WB investigation
work with the Anti-Corruption Commission (ACC) so it is needed to
give independence of ACC to work freely together with WB team &
government should provide all facilities for positive report.
5. Padma Bridge & Bangladesh government:
5.1 Padma Bridge & domestic politics:
Politics of Bangladesh takes place in a framework of
a parliamentary representative democratic republic system whereby
different type’s political parties. But the scenario of domestic
politics in Bangladesh is not so good. There is lack of trust
13
among the different parties. Since our independence to present
time there is no example where the ruling party & opposite party
works together in any crisis situation. This is one of the most
barriers of all types of development. In present time the issues
like Tipaimukh dam, Tista water sharing, Padma Bridge etc the
ruling party & opposite party stand against each other. This is
the real (negative) scenario of domestic’s politics in
Bangladesh. For this attitude (negative attitude) the country has
to pay unimaginable prices.
In present domestic politics the most talkative issue is the
cancellation of WB’s $1.2billion Padma bridge loan. Politics with
the planned Padma Bridge is now live in Bangladesh. Equations in
politics that the planned bridge has generated are complex,
multi-dimensional, and bear deeper implications in more than one
level. This dispute has transcended from a socio economic
investment to political issue. In this issue the leaders of both
political parties start to talk is such a way that they think the
citizens’ are too naïve & can easily be led believing anything
they say.
The ruling party politician are now blaring the slogans that the
World Bank did not insult not only the government but also the
160 million people of Bangladesh. Without understanding the real
scenario, the ruling party leaders started saying that the
government constructs this bridge with their own finance (ADP
budget). The government has announced that the Padma bridge will
14
cost Tk 23,000 crore over 4 years. This year's budget forecasts
show that the total Annual Development Program (ADP) budget for
the next 4 years is expected to be more than Tk 300,000 crore. In
other words, the Padma Bridge will cost about 8% of the ADP
budget. ADP financing of the bridge will make it relatively
expensive because our ADP budgets are mostly financed through
direct government borrowing from the banking sector at interest
rates of up to 11-12%. It will definitely be more expensive than
the 0.75% concessional interest rate that the WB was offering on
its loan. They are saying this to recover their image to the
citizen. They do not think that the corruption is possible in
this project.
The opposition party, BNP, has tactical advantage in this issue.
They can pressurize the government to find out the corrupted
person but without considering the welfare of the country they
use this issue for their party benefits. They directly are saying
that this government is totally corrupted. We were better than
that of the present government. On Saturday, BNP Chairperson
Khaleda Zia alleged that Prime Minister Sheikh Hasina was
involved in corruption of the much-talked-about Padma Bridge
project. “The Padma Bridge couldn’t be built due to corruption of
the Prime Minister and her government.” She branded the present
tenure of the government as an ‘internationally-recognised
corrupt regime’. One of the opposite leader said that “The Prime
Minister knew who were involved in corruption in the Padma bridge
project. She had not taken any action in this regard. But, now
15
she is giving her cell phone numbers and e-mail address to the
citizens. Corruption cannot be buried with such silly tactics”.
This is not right the opposite leaders should analyses the real
situation& gives the constructive advice to the government.5
5.2 WB’s views about Bangladesh domestic politics:
The world bank which giving loan to developing countries doing
more harm than good. They have intentions to control domestic
politics of loan receiving countries. If domestic politics in a
country is strong then WB can’t control this country’s policies.
So when they approves loan of a project, they also gives terms &
conditions of using this loan. WB’s view about Bangladesh
domestic politics is negative. They think that there have lack
accountability, transparency & trust among the political parties.
WB use this chance to show himself as an actor maintain what
polices the government should be taken. Corruption is remaining
in the entire project which is donated by World Bank. In all the
time the ruling government can’t any initiatives to minimize the
corruption. Under structural adjustment policy WB adopted strong
voice against corruption in late 80s.before 80s Bangladesh
governments receive a lot of loan they can’t used these properly
because of corruption. But now WB is strong against corruption
for this they cancel $1.2 billion loans because of corruption.
From the beginning, the World Bank classified its investment in
Bangladesh has “high risk” and expressed concern over a “weak5Farooque Chowdhury, “Bangladesh: Politics With Padma Bridge”,Countercurrents.org,23 July 2012,http:// http://www.countercurrents.org
16
governance environment.” As such, the project entailed numerous
measures to prevent corruption in its Governance and
Accountability Action Plan. WB’s perception about Bangladesh
domestic politics of that it is fully corrupted country & there
is no strong mechanism to raised voice against corruption.
Accountability conception is limited, high officials, political
leaders, are not accountable for their activities.
6. Padma Bridge & good governance:
6.1 Peoples’ hope:
The Padma Bridge will be built to provide road and rail links
between the relatively less developed Southwest region (SWR) of
the country and the more-developed eastern half that includes the
capital of Dhaka and the port city of Chittagong. Furthermore,
because of its location in the South West region of Bangladesh,
Padma Bridge is expected to have larger impacts on this regions
compared to the other parts of Bangladesh. By facilitating
transportation across the river, the bridge is expected to lead
to a greater integration of regional markets within the
Bangladeshi national economy. Given the interdependence of
economic activities/sectors, the direct impacts of the Padma
Bridge on individual sectors and factor markets are likely to
induce a chain of changes in the rest of the sectors of the
economy. It is expected that the Padma Bridge will have the most
significant economic and poverty impacts in Khulna and Barisal
Divisions. At least 30 million people, almost one-fifth of the
17
country’s total population, will directly benefit from the
bridge, according to a study by the World Bank. At the same time,
it is expected to raise Bangladesh’s GDP by 1.2%, pushing it over
7% and thus, enabling it to become a middle-income country by
World Bank standards, with over $1,000 per capita income by 2020.
But the construction of Padma Bridge is canceled because of high
level officials’ corruption. Peoples’ always hope that the
present government will start this project. To begin this project
government must be punished corrupted person & ensure the donor
agencies that present government is against corruption. WB
cancels its approved loan ($1.2billion) by saying that corruption
is remaining in this project. Without WB’s loan it is difficult
(not impossible) to construct Padma bridge. If finally WB cancels
this loan project then the other donor agencies will not provide
loan in this project. So people’s perception is that the
government should communicate the high officials of WB to
reconsider this project & also fulfill the conditions of WB.
Peoples think that if we consider receiving loan others than we
have to pay commercial interest of the loan which will affect our
national economy (more like national GDP) & WB’s loan is more
like noninterest (0.75%) duration to pay is long. So peoples’
perception is that at any cost government should agree WB to
reengage in this project.6
6 Selim Raihan & Bazlul Haque Khondker, , Estimating the Economic Impacts of thePadma Bridge in Bangladesh, November, 2010,http:// mpra.ub.uni-muenchen.de/37904/1/MPRA_paper_37904.pd
18
Figure 2: Dreamy Bridge for the people of bangladesh
6.2 Why good governance fails:
In the 1992 report entitled “Governance and Development”, the
World Bank set out its definition of good governance. This term
is defined as “the manner in which power is exercised in the
management of a country’s economic and social resources for
development”. The World Bank identified three distinct aspects of
governance:
The form of the political regime;
The process by which authority is exercised in the
management of a country’s economic and social resources for
development;
The capacity of governments to design, formulate and
implement policies and discharge functions.
But governance in Bangladesh is very weak. There is no effective
mechanism to ensure good governance from top to bottom. The basic
characteristics of good governance (accountability, transparency,
19
rule of law etc) are limited in our administrative system.
Because of limited good governance corruption is possible.
Entire nation has to suffer for the actions of just a few. The
cancellation of the $1.2 billion credit for the Padma Bridge
project will have an adverse effect on the Bangladesh economy for
years to come. But the ruling government consistently are saying
that there no corruption in Padma bridge project without
inquiring the real situation. Bangladesh has been at, or near,
the bottom of a number of accountability, transparency and
corruption indices over the last decade. Corruption is one of the
leading obstacles to political, economic and social development.
On top of endemic corruption, the rule of law is weak, and there
is limited bureaucratic transparency. It has undermined the rule
of law and has weakened the institutional basis for good
governance.
Good governance fails because the ruling government is not
willing to strong the mechanism of the characteristics of good
governance but good governance is preconditions for all kinds of
development. If the ruling government took measures at initial
stage of WB’s claim then there is to solve this uncertain
situation. Good governance fails mainly the unwillingness of the
government to raise voice against corruptions.
7. Experts’ views: From beginning to present experts’ express very important
analysis about Padma bridge issues. When WB cancel their approved
20
loan because the corruption then the experts gives advice to
government what the government should do in this crisis
situation.
Executive director of transparency international Iftekharuzzaman
said that, “the present government's electoral pledge embodied in
a vision of Bangladesh to achieve the status of a middle-income
country. One of the five top strategic components of the
government's election manifesto was a very uncompromising stance
against corruption. The government should proceed fast to set up
a fully independent special judicial committee of highest
possible credibility to investigate into the allegations of
corruption. The proposed committee should be bestowed with full
powers, independence and technical support to investigate into
the matter and recommend action in accord with the relevant laws
within a specific deadline. While an investigation on alleged
corruption continues in Bangladesh and Canada, to which WB should
provide full support, it should review the decision and find ways
to provide the credit by sharing the responsibility as a key
fiduciary agent of the project to ensure integrity, transparency
and accountability in the implementation process.”
Chairman of Palli Karma-Sahayak Foundation (PKSF) Dr Qazi
Kholiquzzaman Ahmed, said, "I hail the Prime Minister for
deciding to build the Padma Bridge with our own fund, if needed."
21
"The cancellation of the WB contract has opened up an opportunity
for us. Now we can assess our strength as a nation and stretch
our ability,"
Ziauddin choudhury said that, “The World Bank may have canceled
the IDA Credit because it thinks this is the best way to respond
to our seeming unresponsiveness. But the door need not be closed
forever, if we realize that for the greater good of the country
and our people we have to take some bold and corrective steps. A
nation's interest is much more precious and our people's future
is much more important than preserving the interests of an
individual or a few people. I do believe that the government will
take steps to reopen the dialogue with the World Bank. The Bank
remains and should remain our development partner.”
Civil servant A Ahmed said that, “we have to reopen our dialogue
with the World Bank & this time with members who enjoy confidence
of the people & have a reputation of integrity, impartiality, &
negotiating expertise. The Padma Bridge is a national issue for
Bangladesh & must be above politics. The leader of opposition
should stand by the prime minister on this issue.”7
8. Recommendations: 7 Iftekharuzzaman, Ziauddin choudhury & A Ahmed, ,”special feature: Padma bridge”, Economic observer,Vol23, july2012 ,pp:11-20.
22
In present, the most important infrastructural development in our
country is to construct Padma Bridge. The ruling government has
taken initiatives but it is stopped because of uncertainty
between government & the World Bank (donor agency). The World
Bank cancels its loan (1.2 billion) because of corruption. As it
is the manifesto of ruling government to build Padma Bridge so
the government should communicate WB to revive its loan policy.
To reengage WB’s loan policy should take the following measures
(this is mainly my own conception)-
The government should resolve all disputes with the donor
agencies and manage aid coordination in an atmosphere of
mutual trust and respect.
The government to set up a fully independent special
judicial committee to investigate the allegations of
corruption and ensure exemplary punishment to those found
guilty.
The government should raise its voice against corruption.
The government should take corruption into consideration &
formed a trusted committee to investigate corruption.
The government needed to strengthen its procurement system.
The government should be taken initiatives measures to
strengthen the characteristics of good governance.
Government should be punished those person who is engaged in
corruption.
Government should be granted the conditions of the World
Bank & take effective measures to fulfill these conditions.
23
Government should strengthen anti corruption commission
(ACC) to investigate independently.
The government should provide all support to the WB team.
Both ruling party & opposite party should not use this issue
for their party interest rather they should consider it as
national issue & work together to solve this problem.
The overall recommendation for government is that at any
cost the government should start Padma bridge project.
9. Conclusion: Construction of Padma Bridge is expected to generate welfare to
the people of Bangladeshi general and the people of South West in
particular. The benefits are expected to arise from the greater
integration of regional markets within the Bangladeshi national
economy. If it is constructed it will be the largest (6.15)
bridge in our country. It will directly impact the national GDP
(1.2%) of our country. In such project the government should not
compromise against corruption. The government should cooperate
with WB to find out corruption & to revive its loan policy. My
concern is that this issue should be above from dirty domestic
politics. Here in this issue the ruling & opposites should work
together.
Top Related