The Japan International Cooperation Agency has taken an initiative to resume negotiations between the government and the World Bank on the financing of the Padma Multipurpose Bridge, the finance minister said on Thursday.
‘We are in talks with the World Bank through JICA,’ the finance minister, Abul Maal Abdul Muhith told reporters after a meeting at the secretariat on Thursday.
The construction of the bridge on financial assistance from donor agencies became uncertain after the World Bank had pulled out from its loan commitment late June over allegations of corruption.
The government has since then been requesting the World Bank, the coordinator of the project, to review its decision. It has also asked other lending agencies, including co-financiers Japan International Cooperation Agency and the Asian Development Bank, to examine the WB action.
The World Bank has already said that the chance for a review of its decision was slim.
The role of JICA as a mediator between the government and the World Bank is considered to be a major development in reviving the project for the 6.1km railway-cum-road bridge over the River Padma, ministry officials said.
The JICA president, Akihiko Tanaka, is supposed to visit Washington in connection with re-negotiation between two parties, they said.
The finance minister said that a review by the World Bank is one of the three
options the government was considering to implement the project.
The other options are the establishment of a new consortium with additional assistance by the participating donors and the construction of the bridge with self-financing, he said, adding that the government would wait for a month to see the WB response.
Muhith said that about $1.8 billion in foreign currency out of a total of $2.9 billion would be needed to construct the bridge. In the first year of the construction, it will need about $350 million, he said.
He said that already Tk 8 billion had been set aside in the current budget and the government would need Tk 5 billion more in the first year of the construction, which, the minister said, would not be a big problem.
The government has already decided to open bank accounts to collect voluntary donation from private parties as part of self-financing. It has now finalised a guideline.
The government is desperate to begin the bridge construction before the next general elections, scheduled for January 2014 as it was the ruling party’s major election pledge.
But dilly-dally by the World Bank in releasing the committed fund and finally canceling of the funding put the government in trouble.