The construction cost of the Padma Multipurpose Bridge will cross $3.2 billion according to the proposal by a Malaysian consortium, said officials on Sunday.
Malaysia’s special envoy to South Asia on infrastructure, S Samy Vellu, mentioned the estimate while meeting finance minister AMA Muhith.
In Kuala Lumpur on 1 April, 2012 Bangladesh signed a Memorandum of Understanding with Malaysia on construction of the Padma Bridge as part of an alternative funding source.
According to the MoU, the Malaysian public and private agencies will invest at least $2.30 billion for construction of the Padma Bridge.
The finance minister said that the estimated cost was too high, but he assured the envoy that the proposal would be scrutinised and discussed, said officials.
The estimate of the construction cost by the Malaysian envoy is at least $300 million dollars higher than the existing cost estimate of the banks’ consortium.
The World Bank, Asian Development Bank, Japan International Cooperation Agency and Islami Development Bank pledged to provide around $2.3 billion as loan for the Padma Bridge.
But they opted not to release the fund after the World Bank cancelled the loan because of allegations of corruption in June.
The World Bank had promised to lend $1.2 billion for construction of the 6.1 kilometre rail-cum-road bridge across the river Padma.
The finance minister refused to say anything about the outcome of the meeting with the Malaysian envoy when he was asked for his comment by the newsmen.
He said communications minister Obaidul Quader would give the necessary information in this regard.
Earlier on the day, the six-member delegation led by the Malaysian envoy also held a meeting with the communications minister.
Obaidul Quader told reporters that Malaysia would come up with a ‘final proposal’ on the project in three weeks.
According to the MoU between Bangladesh and Malaysia, the Kuala Lumpur-based consortium will construct the bridge on the basis of build, owned, operate and transfer (BOOT).
The MoU will remain valid until December.
Before signing the MoU, Malaysia had submitted an expression of interest under which it stated that the consortium would realise $10 to $13 billion as levy in 50 years.
The consortium said that it would raise the money for bridge construction from United Arab Emirate-based lenders at three per cent interest rate.
It also attached other conditions, including guarantee of subsidy for lower-than-expected earnings and quarterly forecast on traffic flow for 25 years. Duty-free import of construction materials and immunity from laws concerned with environmental and human rights issues are the other major conditions. The government has even been asked not to make any new bridge on the river which would hurt the competitiveness of the proposed bridge.
Experts fear that Kuala Lumpur’s proposal might prove to be too costly for the nation.
Former adviser of the caretaker government, Akbar Ali Khan, told New Age that it would cause problems for the nation if the government sought loans from the international market for construction of the Padma Bridge.
Research director of the Bangladesh Institute of Development Studies, Zaid Bakth, suggested that the government should be more careful in dealing with the investment proposal, especially with regard to payback time and the total amount.