Bangladesh is set to start building the long-awaited Padma Multipurpose Bridge, which could cut travel time between Dhaka and its key port of Khulna to three hours from 12 hours, thanks to a nearly US$420 million finance package from Japan even as it struggles to recover from the March 11 earthquake and tsunami.
Completion of the 6.15-kilometer four-lane bridge, to be built at an estimated cost of $2.97 billion, could add 0.56% to Bangladesh's annual gross domestic product. The bridge will connect the southwestern part of Bangladesh, where 25 % of the total population lives, to other parts of the country. Part of the rationale for construction was the improvements in regional transportation and logistics within the Indian subcontinent, according to Japan, which initiated a feasibility study for the project in 2005.
The $420 million Japan has allotted to the bridge in a May 18 agreement is part of a bigger package worth $670 million that also spans water supply and business development projects and is the biggest financial assistance to Bangladesh from Japan in the past four decades. Further funding gaps that the Bangladesh government had desperately sought to fill were closed on May 24 when the Islamic Development Bank (IDB) agreed to provide a $140 million loan.
Other financiers include the World Bank, which has approved around $1.2 billion and committed an additional $300 million, and the Asian Development Bank (ADB), who is expected to sign an agreement with Bangladesh worth $615 million on June 6. Any shortfall in the construction costs of the bridge will be met by the Bangladesh government.
While IDB, ADB and the World Bank are providing loans, the Japanese package has a 87.07% grant element involved, with ''a concessionality of the loan the highest with 0.01% annual interest rate, 10-year grace period and 40-year repayment period',' Tamotsu Shinotsuka, the Japanese ambassador, said.
Japanese agreement for funding the bridge removes uncertainty following the earthquake and tsunami that ravaged the country's economy in March and allows the tendering process to start for construction work.
Bangladesh has become an international powerhouse in the textiles and apparel sector,” said Steve Jesseph, CEO of WRAP. “As international brands and retailers increasingly rely upon our certification to meet their compliance needs, we wanted to have a local office to better serve the factories and management, and to provide a wider range of training services to benefit all factories in Bangladesh. We are investing in Bangladesh and plan to hire additional staff in the near term as we expand our certification program to the leather and footwear, automotive, pharmaceutical and ceramics sectors, and more,” he added.
Former BGMEA president and current president of the Exporters Association of Bangladesh, Mr. Salam Murshedy, welcomed the opening of the WRAP office in the country and said foreign buyers feel comfortable with factories which have WRAP certificates. “WRAP conducts rigorous compliance inspections and if a factory has the certificate, most of the buyers do not go through their own compliance inspection,” he said.
“We see tremendous potential for the growth of Bangladesh industry and look forward to working closely with our partners and stakeholders, and above all, the wide range of manufacturers,” said Avedis Seferian. “We are fully committed to Bangladesh. This is my 12th trip to Dhaka and Chittagong in the past three years,” he added. “I may have to take an apartment if I continue to travel here so often.”
Since 2000, WRAP has certified labor-intensive consumer products facilities in over 70 countries and currently has 187 facilities certified in Bangladesh.
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