Executive summary The Padma Bridge is a very important scheme of Bangladesh for its development. It will not only bring about infrastructural development but also enhance economic and social welfare of the people of the connected areas. It will save many lives for it will replace the unsafe ferry journeys. However, there had remained some criticalities regarding its financing, because one of the donor financers have charged the padma bridge scheme of corruption, from bribing of high officials by a Canadian Construction consultancy company.
For this, many of the other financers are backing, and GoB has to think of alternative ways, each of which comes with their own cost. The research aims at performing a cost benefit analysis of all the financing alternatives, and derives a conclusion on the basis of sufficient analysis. The research is a qualitative one, and is based primarily on secondary data source. Data analysis is done by literature rivews, and consulting supporting materials. Background of the study 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 toShariatpur and Madaripur, linking the south-west of the country, to northern and eastern regions. The total area of land to be acquired and required for its components is 918 hectares. The two-level steel truss bridge will carry a four-lane highway on the upper level and a single track railway on a lower level. 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 has provisions for rail, gas, electric line and fibre optic cable for future expansion. The project would have co-financed by the government of Bangladesh, the World Bank, the Asian Development Bank, the Japan International Cooperation Agency (JICA) and the Islamic Development Bank. The Bangladesh Bridge Authority is the executing agency 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. Problem identification
On Jun 29, 2012 the World Bank cancelled its $1. 2 billion loan pledged for the Padma Bridge project saying that they had credible evidence for corruption in the Padma project. In the light of loan cancellation by the lead financer World Bank, the Asian Development Bank (ADB) also withdrew its fund from the project on July 2, 2012. Another co-financier Japan International Cooperation Agency (JICA) does not yet cancel its funding to the project, expressing a hope that the government of Bangladesh will deal with the current issues in a constructive way.
The Islamic Development Bank (IDB) is still interested to fund the megaproject. After the cancellation of World Bank and ADB loan, it became essential to look for alternative financing sources. The government already outlined plans for mobilization of national resources for the construction of the bridge. There are other plans of reviving old or getting new international donors. However, each of the alternative sources has their own costs and benefits. Objective
The objective of the study is to make a cost-benefit analysis of the various alternative financing sources proposed by the GoB. There are three major alternative plans for financing the multi-purpose road-rail bridge: First, by reviving the WB-led arrangement for the $2. 3 billion credit from the above-mentioned four development partners. Secondly, by implement the project through a new consortium of the ADB, JICA and IDB. Thirdly, by floating fresh tender and the successful bidders will have to finance a part of the project.
Fourthly, by constructing the bridge with the government’s own resources if other options do not work. Under this plan, there are three major options: * Securitization of revenues emanating from the Bangabondhu (Jamuna) Bridge * IPO/bond issuance by a special purpose entity/company * Joint venture with/local foreign investors * Build Own Operate and Transfer (BOOT) The Padma Bridge is viewed as a 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. It was expected to boost the nation’s GDP growth by 1. 2 and regional GDP by 3. 5 percent point. The government, however, is mulling four options for implementing the Padma bridge project. Research design The research is of a ‘Qualitative’ type, involving no hypothesis selection, or building of a causal relationship between individual theories.
It is purely of a descriptive sort, requiring in depth exploration of a particular situation, allocating information particularly connected to the situation and deriving interpretation based on exploration and researcher’s subjective judgment. The designing of the research will be based on: * Case study selection in accordance with the situation described in research problem * Negative case study selection and interpretation * Use of quantitative data only to support ongoing exploration and enhancing interpretation.
Data collection: As a qualitative research based on case study, major focus will be on the collection of secondary data. Primary data collection methods will involve: * Direct interviewing of people from the areas affected (positive or negative) by the construction * Direct interviewing of some of the high officials of the relative departments, involving open ended questions * Direct interviewing of a random sample of general people, with a structured and concise survey questionnaire. Secondary data will be collected from: Media publications * Journals and publications of related organizations * Previous case studies on the topic Data Analysis Analysis of the collected data will be done in the following ways: * Review of the relevant publications and journals * Thorough literature review on relevant topics * Review of past case studies for gaining in depth knowledge * Review of negative cases for ensuring validation of information collected * Conducting cross-checking of the collected data from multiple sources
Reporting It is kept in mind for the cost/benefit analysis that, the financing mechanism selected should take into account: * Appraisal of economic feasibility * Placing it in the context of good governance and sound economic management, * Building the people’s confidence and combine national agreement be given due priority in the implementation of a project for boosting regional development. Reviving donor consortium should be a better option For the sake of smooth and early implementation of the Padma project * For pursuing better terms with all the development partners of Bangladesh. However, raising the ratio of our own fund (as GoB contribution) to the external assistance by mobilizing own resources be given due magnitude to establish not only national ownership, self respect and dignity, but also to achieve a stronger negotiating ability with the donors. Cost and time:
Cost involved for the research will be reasonable, involving mostly secondary data source. It will mostly require considerable amount of social capital and interpersonal skill. Timetable: Prepare proposal by 1 September Complete literature review by 15 September Complete fieldwork by22 October Complete analysis by 29 October Give presentation on 3 November Complete final report by 16 November Appendix www. bba. gov. bd/ www. worldbank. org/ www. adb. org/ www. isdb. org/ www. plancomm. gov. bd/ecnec. asp
