The Financial Express

Padma Bridge: Its huge impact on economy

Padma Bridge: Its huge impact on economy

Towards the end of 2020, the full length of Padma Bridge of our dream became visible. After installation of the 41st span of the Padma Bridge on December 10, the real specimen of the bridge now can be seen in full view. The total length of the bridge is 10.642 km. The length of the main bridge is 6.15 km and the railway viaduct is 0.532 km. River training of two kilometres of the river is being done to protect the bridge and north bank from erosion. About 13 km of river training is being done to protect the southern bank of the river i.e. Jazira side. Depending on the situation, the area of river training is likely to increase in the future.

The 2.3 km approach road of Padma Bridge at the Mawa end and 12.8 km at the Jazira end have been constructed. Construction expenditure of Padma Bridge increases day by day. In 2007 during the tenure of Caretaker government the expenditure of Padma Bridge was estimated at Taka 10,161 crore (1.47 billion US dollars). That time road construction plan involved 5.58 km. On 6th January 2008 Awami League formed government. In January the US-New Zealand-Australia-based advisory firm Maunsell-Accom was selected for making the detailed design of the bridge.

History of Padma Bridge:

The Padma Bridge has its eventful history. We all know the historical events of its making. After hiring consultants in 2009, they started working. Development partners and lenders expressed interest in lending for the Padma Bridge project. A loan proposal was given by World Bank offering 1000 million dollars, ADB 500 million dollars, JICA 300 million dollars at very low interest rates. After talks between the bridge division and lenders the proposal for the two-storied bridge like one in Denmark was granted. Its cost was earmarked at 2.4 million dollars or 16,970 crore taka. A four-lane road will be built on the steel-based infrastructure, and under the bridge a rail line will be built. Development partners finalised the debt proposal. Papers were signed to allocate 1200 million dollars from World Bank, 615 million from ADB, 430 million from Japan and 140 million from IDB. In 2010 expenditure of the bridge was fixed at 2,972 million dollars or Tk 20,507 crore.

In 2011 the World Bank stated that they found credible evidence of corruption conspiracy and then refused to sanction the proposed loan. Prime Minister Sheikh Hasina told the World Bank to prove this type of allegation. World Bank complained to Canadian Royal Mounted Police against Canadian firm SNC-Lavalin. After that a case was filed in Canada. On 28th June 2012 World Bank's president Robert Zoellick cancelled the debt contract of Padma Bridge. Then other debt firms and donors also went back. The secretary of the ministry of bridge was sent on forced retirement. That time the secretary was Mosharraf Hossain Bhuiyan. World Bank directed Anti-Corruption Commission (ACC) to file a case against former minister of communication Syed Abul Hossain, former minister of state Abul Hasan Chowdhury and Finance Adviser Dr. Mashiur Rahman. ACC however arrested former secretary Mosharraf Hossain Bhuiyan. He lost his job also. But World Bank did not give the loan assistance at all.

Due to the delay of the World Bank, Prime Minister Sheikh Hasina on January 31, 2013 rejected the loan of the World Bank and announced the construction of the Padma Bridge with own funds. This was a bold decision. Historical decision. Work on the Padma Bridge was inaugurated in 2015. The first span of the Padma Bridge was laid in 2016. The last span was set up on 10 December 2020.

Bridge Minister Obaidul Quader has announced that the Padma Bridge will open to traffic in 2022. The Padma Bridge has been praised at home and abroad for its self-financing. The dignity of the country has also increased. It has been able to set an example of Bangladesh's economic potential. Bangladesh can do something good. Bangladesh is now a capable country. Problems with the World Bank, loan suspensions and delays on different occasions have prolonged implementation of the bridge. The construction of the bridge was supposed to be completed in 2014. There are also allegations of corruption behind the increase in expenditure. Now the expenditure is Tk 301.93 billion (30,193 crore). It will take another two years to complete. It will increase the cost. Then the largest bridge of the country will open to traffic.

Economic impact:

The construction of the bridge will have a huge economic impact on the country. In an analysis or study report by Maunsell, the bridge's design consultant, in 2010, the bridge's Benefit-Cost Ratio (BCR) was 1.6 per cent and the Economic Internal Rate of Return (ERR) was 18 per cent. Add the cost of bridge construction. The BCR will be 2.1 and ERR 22 per cent. In other words, construction of this bridge will be economically profitable. Dhaka's communication with 21 southern districts will be reduced by 2 to 4 hours. The direct connectivity with the capital will help expand trade and commerce, ease supply of raw materials and industrialization. Small and big industries will be set up in the 21 districts. Agriculture will greatly improve. Farmers will get better commodity prices. Production will increase.

In addition to the design consultants, the World Bank's independent consultants and the consultancy firm employed by the Bridges Division have analyzed the economic impact of the bridge. According to the survey report, the economic impact of the bridge will help increase the annual GDP of the south by 2.0 per cent and the overall GDP of the country by more than 1.0 per cent. The construction of the bridge will improve the integrated communication structure of the country. The southern part of the country will get connected to the Trans-Asian Highway (N-8) and the Trans-Asian Railway. Bangladesh will have international connectivity with India, Bhutan and Nepal. Economic zones, high-tech parks and private industrial cities will be built on both sides of the bridge. Investment and employment will increase.

Mongla and Payra seaports will be operational. The tourism industry will flourish and new and old tourist destinations, including Kuakata beach in the southern region, the Sundarbans, the sixty-domed mosque, Bangabandhu Mazar in Tungipara, old and new resorts at Mawa and Jazira will attract domestic and foreign tourists. According to the 2010 estimates, 12,000 vehicles were crossing the Padma river. The traffic can double, if the bridge is opened and the number of vehicles will increase by 7-8 per cent every year and by 2050, 67,000 vehicles will run.

Toll rate of Padma bridge:

All countries have toll collection rules to cover the cost of any bridge or installation. Even if it is a bridge with its own financing or loan, there is no way for a big project to go without collecting toll. Tolls of small bridges are still being collected in our country which should not be done. The only large and national installations see toll collection in different countries of the world. Therefore, it is okay that toll for the bridge will be collected from the Padma Bridge. However, how much it will be, how it will be, for how many years this cost will be recovered, etc. are the issues of discussion. The bridge department has signed an agreement involving Tk 299 billion (29,900 crore) with the ministry to meet the cost of the Padma Bridge. The bridge department will repay the loan in 140 instalments over a period of 35 years at the rate of 1.0 per cent. Therefore, the toll has to be collected in such a way that the loan money and all the expenses for the maintenance of the bridge can be borne from the toll. At present, the loan amount can be easily repaid by increasing the cost of ferry crossing by 50 per cent. But this would not be right. It will increase the cost of living. That is why we will not get the benefit of the Padma Bridge. The cost of carrying goods will increase. The common people will not benefit from it. Therefore, the interest rate should be reduced. As a result, the toll collected will be less. The cost of transportation will be less. Farmers and traders will all benefit. Take the case of Jamuna Bridge. The toll on this bridge is high. The cost of the bridge has already been recovered. But the toll of the bridge has not been reduced yet. Jamuna Bridge toll should be reduced. This will reduce the cost of carrying goods. People will benefit more. Due to the high cost of transportation, we have to buy vegetables in Dhaka at the price of Tk 30. In Bogura it is only Tk 3.00. Similarly, if the toll of Padma Bridge is higher, the prices of goods will not be stable. Economists believe that with the opening of the Padma Bridge, the country's overall standing in the poverty index will fall. People's income will increase. Various installations will be built on both sides of the Padma Bridge. Industrial development will happen. As a result, there will be a lot of progress in the human development index. The collection of these vehicle tolls will also contribute to our national growth.

Over the past few years, our economic progress, GDP growth, and the gradual improvement of various social indicators have gained international recognition. Bangladesh's capacity has been recognized due to its own mega projects like the Padma Bridge. We have talents. Our knowledge is no less than others. For taking this bold decision, Prime Minister Sheikh Hasina has gained applause far and wide. The nation will forever remember China's mechanical and financial cooperation in construction of the bridge.

The author is former Vice President of FBCCI, BTMEA, BGMEA, Association of Private Universities of  Bangladesh, Founding Chairman of Eastern University, Islamic Finance and Investment Ltd., Australian International School and Abul Quasem Haider Mohila College, Sandwip, Chattogram, and

former senate member, University of Dhaka.
[email protected]

Share if you like