The government will need healthy sums of foreign currency in 2015 to pay the bills of the foreign contractors who will start working on the construction of the Padma bridge by then, Finance Minister AMA Muhith has said.
While addressing a press conference at the ministry yesterday, he said a small amount of money had already been allocated for this year for funding the construction of riverbank protection at the Janzira point.
However, he said the “big foreign contractors” were yet to sign any agreement for the construction work because the tender processes could not be completed within this year.
“We will be needing the amount [foreign currency] after finishing the selection of foreign contractors,” he said.
The minister also said state-run Agrani Bank had been tasked with raising $2.1bn from the money market in the next five fiscal years (2013-14 to FY2017-18).
According to the Finance Division of the Ministry of Finance, around $200m will be needed during the ongoing fiscal, $700m for the next, $600m for FY16, $500m for FY17 and $100m for FY18.
The government will give these amounts to the Agrani Bank, who will pay the bills of the foreign contractors by purchasing foreign currency from the money market if needed.
Also present at the press conference, Bangladesh Bank Governor Atiur Rahman said if Agrani Bank failed to amass enough foreign currency, the central bank would step in to settle the payments.
The governor also said the central bank would be the guarantor for making the payments to the foreign contractors, in case Agrani Bank failed.
Originally, the Padma bridge was supposed to be funded by the World Bank (WB), Asian Development Bank, Islamic Development Bank and Jica. But in 2012, the WB scrapped its $1.2bn financing deal with the government over alleged corruption conspiracy.
The other donors soon followed the WB prompting the government to make a decision on implementing the project – said to the biggest ever development project in the country’s history – with its own fund.