A state-owned bank ensured sole forex support to Padma Bridge

 
A gazette on the naming of the Padma Bridge was issued on 29 May 2022 which was signed by Deputy Secretary Md. Abul Hasan under the directive of the President. Nevertheless, it should be remembered that the construction of Padma Bridge was not at all a smooth job. Despite a broad spectrum of hostile circumstances, obstacles and propaganda, the construction of Padma Bridge has come to its accomplishment. Padma Bridge has been a bold step by Prime Minister Sheikh Hasina. It is a success story of the government.

The long-awaited Padma Bridge is going to be inaugurated by Prime Minister Sheikh Hasina on 25 June 2022. This bridge is expected to revolutionize communication between the country's southwestern region and the rest of Bangladesh including Dhaka.

However, it is not known to all that a state-owned bank provided financial backup for the construction of Padma Bridge. Agrani Bank Limited has played an important role in Bangladesh's development financing by supporting mega projects including the Padma Bridge. The second-largest state-owned bank has so far provided $1.4 billion to Padma Bridge project after the World Bank withdrew its promised $ 1.2 billion loans bringing corruption allegations several years back.

Agrani Bank Limited came up with dollars from its own earnings over the last seven years. It did not have to buy any foreign currency from the reserve of Bangladesh Bank (BB) to finance one of the largest infrastructure projects in the country, said Agrani Bank officials.

The celebration of Mujib Borsho and Bangladesh's independence golden jubilee was held at a time. One particular milestone of the observance of Mujib Borsho was the launching of Bangabandhu Corner which was the brainchild of Agrani Bank's Managing Director and Chief Executive Officer (CEO) Shams Ul Islam.

Shams Ul Islam for the first time introduced Bangabandhu Corner in his bank during Mujib Borsho. However, it is astonishing that neither Agrani Bank nor its Managing Director was given any special recognition for their contribution to the construction of the Padma Bridge. Shams Ul Islam should be duly recognized and evaluated for his role, according to prominent citizens.Dr. Atiur Rahman, when he was Bangladesh Bank's Governor, assured Prime Minister Sheikh Hasina that Padma Bridge can be built up with the country's own funds.

Agrani Bank also financially supported the construction work of Hanif Flyover. Besides, Agrani Bank financed 15 power plants generating 2,356 megawatts of electricity.The bank will pay a further $700 million in foreign currency by this June. The rest of the payments will gradually be made until June 2022. The government pays back Agrani in local currency for the dollars.

After several deadline extensions and cost escalations, the Padma Bridge project, which the government intends to complete by June 2022, requires $2.4 billion in foreign currency.The total cost for the 6.15km bridge is Tk 30,193 crore, or $3.56 billion.Of this, $2.4 billion needs to be paid in foreign currency and the rest in the local currency, according to the Bridges Division, the implementing authority of the project.

The Padma Bridge project is being implemented with the country's own funds after the World Bank and other international lenders cancelled financing in 2011 over allegations of corruption, which the government denied.Allegations against government and project officials were later dismissed by the Anti-Corruption Commission of Bangladesh and a Dhaka court. A Canadian court also found no proof of graft conspiracy involving the project.

The forex reserve of the country stood at $42.98 billion on March 10, up 33 per cent from $32.42 billion year-on-year, BB data showed.Buoyed by rising foreign exchange reserves and export earnings, the government in 2012 decided to go ahead with the project with its own resources. Then came the question of making payments to the international contractors and consultancy firms in foreign currency.During a meeting on February 3, 2014, on the management of the foreign currency, the Bridges Division decided that Agrani Bank, with which the division had already opened an account, would provide the money from its own foreign currency reserve or from the inter-bank forex market.

If there was still any shortfall, the BB would sell foreign currency to Agrani Bank, it was agreed in the meeting.Starting with $6.26 million in 2013, Agrani Bank has so far paid out $1.2 billion. Last year, it contributed $126 million, according to the bank's data."Initially, we thought we would buy foreign currencies from the Bangladesh Bank's reserve. But we have been able to pay solely from our own sources, especially from the foreign currency that our bank has earned," said Zaid Bakht, Chairman of Agrani Bank.

"We are proud to have been working on such a transformational project," he told journalists.He hoped that the bank would be able to make foreign currency payments in the future from its own earnings.The total money for the project comes from the government's own funds. To build the bridge, the government makes allocations in the Annual Development Program (ADP).

Both local and foreign payments are being made through Agrani Bank, said Shafiqul Islam, director of the Padma Multipurpose Bridge Project.The construction of the Padma Bridge started in November 2014 to connect the country's 21 south and south-western districts with the capital via road and rail. The first span was installed on September 30, 2017.

Now fully visible, with the completion of the last span installation in December last year, the two-level steel truss composite bridge is expected to be a major boost to trade and economic activities.Once in service, the mega bridge -- the top deck accommodating a four-lane highway for vehicles and the lower deck for a set of railway tracks -- will connect multi-lane expressways and railway lines with Dhaka to Mongla port and the deep-sea port at Payra.

The fast-track project is expected to boost the country's gross domestic product by 1.2 per cent.The progress of the project was 82.5 per cent as of November last year. Around 91 per cent of work of the main bridge is done, while 76 per cent work of river regulating has been completed, according to project documents.

The original cost -- Tk 10,161 crore -- for the bridge was estimated in 2007 on the basis of a feasibility study. It did not include the cost of railway lines on the bridge at that time.After several revisions, the cost of the project rose to Tk 30,193 crore.Now, the installation of the roadway deck and railway stringers is going on in full swing.One of the major issues that are yet to be finalized is the bridge toll. A committee is working to finalize the rate.