Finance Minister AMA Muhith on Thursday termed China’s proposal for investment in the Padma bridge project “unacceptable”; although Communications Minister Obaidul Quader had labelled it “not bad” just a couple of days ago.
On Tuesday, Chinese state-owned company Poly Technologies Incorporation extended a proposal for a special investment of $2.4bn for the Padma Multipurpose Bridge to assist the government in the construction.
The offer was put forward under the government to government (G2G) agreement on a “build-own-operate-transfer” (BOOT) basis.
BOOT is a form of project financing, wherein a private entity receives a concession from the private or public sector to finance, design, construct, and operate a facility stated in the concession contract. This enables the project proponent to recover its investment, operating and maintenance expenses in the project.
The finance minister made the remark about the Chinese proposal after a meeting with Russian ambassador to Dhaka Alexander Mikolaev and Indian High Commissioner Pankaj Saran at his secretariat office on Saturday.
Muhith told reporters that the Chinese company’s proposal was not viable and hence not acceptable.
The 6.15km rail-road bridge over the country’s largest river Padma was Bangladesh’s biggest ever infrastructure project.
He had repeatedly insisted in the past that it was imperative that the bridge was built with internal resources.
“We need to withdraw the global tender if the government accepts the Chinese offer or any such offer, although implementing the project through a global tender is basic for Bangladesh,” Muhith told reporters.
He added that global tendering was extremely important not only for ensuring the use of impeccable technology, but also because there had been accusations of conspiracy of corruption surrounding the project.
“The Chinese company’s offer is now being evaluated by the Economic Relations Division. We will take the proposal to appropriate quarters before giving a final decision,” Muhith said.
The finance minister also said Russia’s offer for a general contract with some credit facilities for the Padma bridge could not be accepted either for the same reason.
The World Bank was supposed to give a $1.2bn for the $2.9bn project. The Asian Development Bank and the Japan International Cooperation Agency were to put in $1bn between themselves.
However, Bangladesh government in January this year withdrew its funding request to the global lender after a tug-of-war over graft allegations involving ministers and government officials.
Investment proposals from China and Malaysia followed soon after but the government announced that it would fund the project with its own resources.
The government has allocated TK68.52bn for the project in the national budget for the 2013-14 fiscal year, while a Tk91bn global tender was floated for the construction of the bridge.