Padma Bridge rail link faces setback | daily-sun.com

Delay in Chinese Loan Deal

Padma Bridge rail link faces setback

Hasibul Aman     10th April, 2017 12:54:35 printer

Padma Bridge rail link faces setback

Design of Padma Bridge

The hope of opening the Padma rail link simultaneously with the Padma Bridge by 2018 may remain unfulfilled as the government has failed to confirm Chinese funds required for the mega project’s beginning of work in 2017.

 

The government made hectic efforts in FY 17 to mobilise Tk 2,742 crore in Chinese funds for the 169-km rail route project, but reaching a loan deal with China Exim Bank and disbursement of the funds will not be possible by this June, sources at the Economic Relations Division (ERD) said.    

 

During Chinese President Xi Jinping’s Dhaka visit in October last year, China pledged Tk 24,449 crore in loans for the nearly Tk 35,000-crore proposed rail route from Dhaka to Jessore.  

 

The railway ministry recently requested the Planning Commission to curtail the Tk 3,415 crore funds allocated for the project in the revised annual development program (ADP), confirming its inability to utilise the funds this year, sources said.   

 

This amount includes Tk 2,742 crore estimated Chinese assistance and Tk 673 crore GoB matching funds.

The allocation in the revised ADP for the project was Tk 4,813 crore, including Tk 2,071 crore GoB fund and Tk 2742 crore project assistance.

 

The implementing agency has said it will be able to spend only Tk 1,398 crore from local resources for the project in the current 2016-17 fiscal.

 

Citing the reasons for the fund curtail request, the railway ministry informed the Planning Commission that they will not be able to spend the allocated money as the signing of the loan deal with China and complying with the conditions of activating the loan will take more time, official sources said.

 

“The GoB fund allocated for the project this year has already been utilised. But the signing of the loan agreement and its activation will take at least up to June. For this, it is not possible to utilise the Chinese loan this year,” a railway high-up said.  

 

Although the project somewhat lingered, the railway official was, however, hopeful that they would be able to spend this unutilised fund along with fresh allocations in the next fiscal year.

 

Railway officials said they had earlier projected that the Chinese funds will not be available this year, for which they proposed for allocating the required Chinese portion from local resources, but they did not get that allocation.

 

With the funding delay, they fear that the project might miss the year-wise implementation deadline.  

 

Prime Minister Sheikh Hasina had earlier made an announcement that the rail line through the under-construction Padma multi-purpose bridge will open to the public simultaneously with the bridge’s construction by December 2018.

 

The government already signed an agreement with a Chinese government-selected contractor — China Railway Group Ltd in August last year for the project.

 

Accordingly, ERD submitted a loan application for nearly $3.14 billion to China Exim Bank, the project’s financier, through Chinese Embassy in Dhaka in the following month.

 

But the Chinese bank did not take any visible steps towards completing the loan agreement and the fund activation, local officials alleged.

 

The loan could not be activated even after Prime Minister’s Office (PMO) and the finance minister sent letters to Chinese authorities in this regard, showing urgency for the money.

 

Earlier, the Railways Ministry in a report prepared for the PM observed that constructing the rail track would face difficulties if its design and activities are not ready along with Padma Bridge’s construction.

 

The government approved the fast-track project in May last year with a hope to provide more transport facilities to people immediately after Padma’ bridge construction.

 


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