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Trade & Investment

Locals Urge Fresh Negotiations on Padma Bridge Funding

DHAKA, Jul 10 2012 (IPS) - Amidst continuing controversy over the World Bank’s recent decision to cancel a 1.2 billion-dollar loan to Bangladesh to assist in the construction of the Padma Bridge – which would have been the country’s largest ever development project, worth 2.9 billion dollars – most locals have expressed deep concern about the impact of such a move on one of the world’s least developed countries.

Citing graft allegations brought against the former communications minister Syed Abul Hossain, the World Bank decided to withdraw its grant, which was formally announced in a press statement on Jun. 29.

The Bangladeshi government vociferously denied the accusation of corruption, and insists that it will continue the project on its own.

Now, politicians, academics, journalists, businessmen, lawyers, environmentalists, and members of civil society are clamouring for government and Bank officials to put aside their differences and continue negotiations in the interest of economic development.

Many observers and experts here believe the government should not simply reject the allegations outright but should work together with Bank officials in a professional manner to resolve the dispute and get to the bottom of any lingering doubts about the management of funds, in a bid to move the project forward.

Graft allegations 

Construction of the multipurpose bridge, comprised of a four-lane road on the upper deck and rail tracks on the lower deck, was supposed to begin last October.

The proposed bridge, expected to have been the largest transport project in South Asia, was set to connect the impoverished southwest with the capital, Dhaka, and with Eastern parts of the country, replacing the dilapidated ferry system that currently transports thousands of vehicles, including goods trucks, across the Padma river every day.

The Bank suspended its loan for the massive project based on a referral to a case filed by the Royal Canadian Mounted Police (RCMP) against the Canadian engineering firm SNC Lavalin, stating that the latter had bribed former communications minister Hossain in order to secure its bid to become the main consultant on the project.

The government repeatedly denied the allegation but under enourmous public pressure finally tasked its Anti-Corruption Commission (ACC) with investigating the case.

Last February the ACC deemed the allegations against Hossain to be false, thus clearing him of all charges. Although Hossain was removed from his post last December, he was subsequently appointed head of the ministry of information and communication technology.

Meanwhile, the Asian Development Bank, another of the project’s co-financers, scrapped its 610 million-dollar pledge, claiming, “The ADB and the World Bank follow similar policies, rules and procedures on governance and fiduciary oversight.”

In the name of development

The acting Secretary General of the country’s main opposition Bangladesh Nationalist Party (BNP), Mirza Fakrul Islam Alamgir, told IPS that this isn’t the first time such allegations have been leveled at the government.

“We have, in previous statements, pointed out that there were numerous allegations of corruption against the government.”

Fakrul continued, “Instead of denying these allegations as usual, the government should have taken action against those found guilty.”

Transparency International Bangladesh (TIB) has termed the Bank’s decision “deeply regrettable” and urged the global lending agency to review its decision.

TIB’s Executive Director, Iftekhar Zaman, told IPS, “The (Bank’s) decision is questionable. It abruptly cut off the fund without considering the magnitude of benefit from such a mega-giant project.”

Zaman also called upon the government to demonstrate transparency and accountability by setting up a fully independent special judicial committee to investigate the allegations of corruption and ensure punishment of those found guilty. “This would create new avenues for negotiations and lead to the development of fresh relations,” he said.

The World Bank is currently Bangladesh’s biggest development partner, collaborating with the government on a total of 34 projects worth 5.8 billion dollars.

Noted journalist and CEO of Boishakhi TV, Monjurul Ahsan, stressed, “The government should not have got into a confrontation with a partner who is (crucial) to the future development of this nation.”

Ahsan added, however, that Bank should have made the specifics of its allegation public for the sake of transparency.

Noted environmental activist, Dr. Atiq Rahman, told IPS, “There is an absence of good governance and lack of trust or faith between the parties which must be re-established at any cost so that both have mutual respect for one another.”

Atiq, who is also Executive Director of the country’s leading policy research organisation, the Bangladesh Centre for Advanced Studies (BCAS), said, “It is very sad that the decision came unexpectedly from such a responsible development partner.”

Dr. Debapriya Bhattacharya, Executive Director of the Centre for Policy Dialogue (CPD), told IPS that Bangladesh has, in the last few years, attempted to rectify its international image, which has been somewhat tarnished by controversial events like Muhammad Yunus’ departure from the Grameen Bank; the disappearance of opposition leader Illias Ali; frequent labour unrest in the garment sector; and a string of extrajudicial killings pinned on the elite armed force, the Rapid Action Battalion (RAB).

“The Padma Bridge chapter will obviously give a jolt to that process. It will send a negative signal to potential foreign investors. We need to remember that Bangladesh has been under constant watchful eyes from abroad,” he added.

Benefits to local communities

Most people living in rural areas say they want the planned 6.15 kilometre-long bridge to be constructed as soon as possible, at any cost. The majority of IPS’ interviewees said they want to see rapid development of the southwest, especially growth in industries.

Statistics from a study conducted in 2004 reveal that about 40 percent of the population of the southwestern region, comprising 17 of the country’s 64 districts, lives below the poverty line.

The bridge was expected to form part of the trans-Asian railway as well as the Asian highway. The bridge would have allowed all 17 districts to receive direct pipeline gas connections, thus boosting economic activities in a region that currently relies heavily on agriculture, jute and shrimp, which are produced primarily for export.

Construction of the bridge would have cut the distance between Dhaka and the southwestern district by 240 kilometres, thus facilitating internal transport of goods.

Other studies have shown that the bridge could generate employment for 743,000 people annually, effectively employing 1.2 percent of the country’s total labour force.

Motiur Rahman, a tea stall owner in Mawa Ghat of Munshiganj district had planned to run a transport service between his tiny village of Janjira and the capital, which would have earned him at least 7-9.5 dollars per day from each ten-seater minibus.

He told IPS that he was deeply saddened by news of the project’s cancellation.

With the country just one and a half years away from the next national election, Motiur believes the government should come through on the bridge project, which the ruling Awami League Party had pledged as one of its many election promises.

Sharif Mohammad Azad, a private bank executive in Khulna district said, “If the Bank refuses to provide money the government can always raise money through pre-taxing as happened in the case of the Jamuna Multipurpose Bridge, and find a couple of suitable development partners.”

The Bangladesh Insurance Association (BIA), the official body comprising all private sector insurance companies in the country, has already expressed interest in joining the project as a co-investor, injecting 110 billion taka (or 1.3 billion dollars) into the project.

The other major co-financiers of the project – the Japan International Cooperation Agency (JICA) and the Jeddah-based Islamic Development Bank – have so far stood firm on their commitments of 400 million dollars and 140 million dollars respectively.


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