Bangladesh: Padma Bridge getting costlier

The long-cherished Padma Bridge is set to cost more as more funds and time is needed to complete the structure even though it is open to the public since June 2022.

At the time of inauguration on June 25, 2022, some works, especially river training, a major component of the project, were incomplete.

Now, the bridges division has sought Tk 2,682.13 crore more and an additional year, according to the revision proposal sent to the Planning Commission for approval.

If the proposal is approved, the bridge, which established a direct connection between the capital and the country’s southwest, will end up costing Tk 32,875.51 crore — more than three times the original estimate.

Project Director Shafiqul Islam cited the increase in the cost of construction materials, depreciation of taka against the dollar, the need for additional money to build power transmission towers and increase in value-added tax and income tax rates due to changes in legislation as the main reasons for the latest round of cost escalation.

The project authorities would need Tk 3,444.89 crore extra but they are clawing back Tk 762.76 crore from several components, including Tk 368.09 crore allocated for resettlement.

Of the sum, Tk 1,665.60 crore would be required for the main bridge, Tk 877.53 crore for river training and Tk 450.29 crore for consultancy services.

“The US dollar traded at Tk 78.3 in the foreign exchange market when we started the works but the rate has escalated since then. We had to spend an additional Tk 500-600 crore for this reason alone,” Islam said.

The government on many occasions has changed VAT and income tax rates.

In the case of foreign contractors, the VAT and income tax have been increased to 15% from 10.5%, so the project authorities have to provide the additional 4.5% as per the contract, he said. This cost the project authorities an additional Tk 687 crore, according to officials.

The project authorities have to spend about Tk 400 crore more for the detailed design and construction of foundations of seven 400KV transmission towers on the Padma.

They will also have to procure some equipment for the operation of the bridge, which will take about Tk 300 crore, he said.

Approved in August 2007, the project was supposed to be implemented at the cost of Tk 10,162 crore within June 2015. In 2011, it went through a major revision that took the project cost to Tk 20,507 crore. After two more changes in expenditure, the project cost rose to Tk 30,193.34 crore. The latest deadline for the project is June this year, including a year as a defect liability period.

Asked about the reason behind the time extension, Islam said they would take up to June this year to complete the river training works.Then, they would require another year for the defects liability period.

A defects liability period is the time period specified in the contract during which a contractor is legally required to return to a construction site to repair any defects which have appeared in that contractor’s work since the date of completion.

“That’s why we sought the deadline extension to June 2024,” Islam added.

As of December 2022, the project saw 95.8% overall progress, with 99.7% and 96.25% progress in main bridge and river training respectively. The project saw 93.68% financial progress.

 

World Bank happy over Padma Bridge opening

The World Bank that pulled out of financing Padma Bridge, citing a never-proven “corruption conspiracy”, has now congratulated Bangladesh and its people on completion of the much-awaited bridge.

“We are happy that the bridge is complete and Bangladesh will benefit from it,” World Bank Country Director for Bangladesh Mercy Tembon told the media during the inauguration event on the Mawa end of the bridge.

Now is the time to move Bangladesh-World Bank relations forward. The Padma Bridge will make a huge contribution to the economic growth of Bangladesh, she said.

“This bridge will contribute to accelerating integrated growth in the country and reducing poverty,” she added.

The World Bank, which initially agreed to co-finance the construction of Padma Bridge, cancelled its loan alleging corruption over the appointment of consultants for the bridge.

The Washington-based agency had a loan deal amounting to US$1.2 billion with Bangladesh for the project involving an initial estimated cost of US$2.9 billion.

Other lenders, such as the Asian Development Bank, Japan International Cooperation Agency, and the Islamic Development Bank also backed out of financing the bridge, leaving the government quite off-guard and embarrassed.

But, neither a case by the Anti-Corruption Commission nor another in a Canadian court failed to prove the corruption allegations.

It was Prime Minister Sheikh Hasina who stood alone and decided to go ahead with the nearly US$4 billion project with the country’s own funds.

The government took a challenge and proceeded with the self-financing plan, keeping aside money in the annual budget for the Padma Bridge project. The construction began in December 2015.

Dispelling all clouds of uncertainties, Prime Minister Sheikh Hasina finally inaugurated the long-awaited Padma Bridge, the longest in Bangladesh, connecting people on both sides of the Padma River.

The Padma Bridge project has been implemented at a cost of Tk30,193.39 crore with almost 100% internal funding which is believed to bring a new world to the country’s economy by connecting 21 southwestern districts through roads and railways with the capital.

The construction of the 6.15km (3.82 miles) bridge began in November 2015 to connect 21 districts of the country’s southwest with Dhaka via road and rail, thereby cutting travel time considerably.

The double-layer steel truss bridge incorporates a four-lane highway on an upper level along with a single-track railway on the lower level.

This is one of the largest mega projects Bangladesh has ever undertaken and the entire amount is financed by the Bangladesh government.