BY SELF-FUNDING THE PADMA BRIDGE, DHAKA HAS GOT THE WEST OFF ITS BACK
After three years of uncertainty, Sheikh Hasina’s government has finally cleared Bangladesh’s most ambitious infrastructure project so far. It has finally awarded the contract for construction of the main structure of the 6.15-km railroad bridge on the mighty Padma — which is what the Ganges is called when it enters Bangladesh — to a Chinese firm, Major Bridge Engineering Co.
Bridging the mighty Padma would be an engineering marvel. It will link the national command region around capital Dhaka to 21 southern districts. Once commissioned, the bridge will boost Bangladesh’s GDP by an additional 1.2% every year.
A Proud Moment
It will be a game-changer for Bangladesh’s economy and a great boost to its pride, now that Bangladesh has decided to do the project with its own resources. It will reverse Bangladesh’s image of a basket case and place it firmly on the road to emerge as a middle-income nation by 2021 — a task the Hasina government has set for itself to achieve.
The $3-billion project has been hanging fire since the World Bank levelled serious corruption allegations against senior ministers of Hasina’s government in awarding contracts for the bridge. The World Bank was supposed to fund $1.2 billion, and other funding agencies such as ADB and Jica were to fund the rest of the project. Hasina promised to look into the allegations and got an enquiry started by Bangladesh’s Anti-Corruption Commission, but she wanted the project to proceed swiftly. That did not happen.
Calling the Bluff
Though the corruption allegations cannot be ruled out, it almost looked like an attack on the Hasina government, organised by the West, to discredit her government before elections.
Finally, a year before the January 2014 parliament polls, she called the World Bank’s bluff and withdrew her government’s funding request to the global lender.
In no time, she had offers of funding from China and Malaysia, but she rejected both — some say she did not want to upset India by taking Chinese funding for the project and decided to go ahead with “Bangladesh’s own resources”.
Buoyed by steady GDP growth and augmented remittances from Bangladeshi expatriates running into $15 billion annually, a current account surplus at $2.57 billion in the last fiscal year and with garment exports growing despite a year of political turmoil in the rundown to the elections, Hasina was determined to use the issue to make a larger statement about Bangladesh and its future.
That it could do a huge project like this with its own resources — by turning down the World Bank and calling the West’s bluff and that it could keep its economy on course despite a violent political agitation by an Islamist Opposition that targeted road and rail transport — will boost Bangladesh’s case as an investment destination, especially in its southern coastal region, once the Padma bridge is completed. Hasina’s ability to deal with the agitation firmly and pushing these big-ticket projects will help gain confidence.
Finance minister A M A Muhith says his government is allocating taka 121 billion for the bridge that the Chinese construction company has asked for. The cost has gone up by taka 30 billion — initially, the project cost was estimated at $91.72 billion — due to a three-year delay.
A New Era in Transport
But Muhith is confident of paying the Chinese firm and completing it by end-2017 even though the final cost may escalate to taka 160 billion. In any case, the Chinese firm has quoted 12% less than the estimated cost of the project.
Muhith recently told journalists in Dhaka that he was determined to complete the Padma bridge and fourlane the Dhaka-Chittagong highway that connects the capital and the country’s main industrial zone with its leading port within the current term of the Hasina government ending in January 2019. Like Narendra Modi, Hasina’s priority is developing infrastructure, because she reckons that will pay in the long run. Corruption and inefficiency have adversely affected her government’s performance, but not deflected her from the course.
Like Modi, she is also trying to strike a balance between China and other Asian nations like Japan and South Korea who are wary of the Dragon. During her recent trip to Tokyo — for which she could not attend Modi’s swearing-in — Hasina sought Japanese help for several key infrastructure projects, including the Dhaka metro rail project.
The Japanese may well oblige — Prime Minister Shinzo Abe has already promised an additional $6 billion in aid. If Hasina can get the Chinese to construct the Padma bridge and four-lane the Dhaka-Chittagong highway and the Japanese to do crucial projects like the Dhaka metro rail, there is no reason why Modi cannot get both China and Japan to heavily invest in the Indian economy, especially in its infrastructure sector.
India’s economic revival, like Bangladesh’s, could well be a great case for an Asian century.
The writer is a veteran journalist
JUNE 16, 2014