Dhaka (The Daily Star/ANN) - A high-profile Bangladeshi delegation headed by Communications Minister Obaidul Quader leaves for Kuala Lumpur tonight to sign a Memorandum of Understanding (MoU) on April 10 on Malaysian funding for the US$2.9 billion Padma Bridge project.
Economic Relations Division Secretary Iqbal Mahmud, Bridges Division Secretary Khandaker Anwarul Islam and project director Shafiqul Islam will accompany the minister.
"We are going there to sign an MoU. I myself or the ERD secretary may sign it," Quader told The Daily Star yesterday. He, however, declined to elaborate on the matter.
In April last year, the government signed an agreement with the World Bank for a $1.2 billion loan to construct the country's longest bridge. Asian Development Bank was to provide $615 million, Japan International Cooperation Agency $400 million and Islamic Development Bank $140 million for construction of the multipurpose bridge. But the project stalled in October when the WB alleged corruption in the bidding process.
In January, Malaysia formally proposed giving a $2.19 billion loan for the bridge. An MoU was supposed to be signed on February 21, but the move was cancelled for some technical reasons.
On Friday night, Prime Minister Sheikh Hasina said the Padma Bridge would be constructed with Malaysian fund and an MoU in this regard would be signed on April 10. She was speaking at a meeting of the Awami League Central Working Committee.
Her announcement came three days after the WB suspended a unit of Canadian company SNC-Lavalin from bidding in WB-funded projects. The unit, identified in a Canadian newspaper as the engineering firm's Bangladesh subsidiary, had bid for supervisory consultancy of the project, which involved $50 million.
Amid uncertainty over the mega project, Finance Minister AMA Muhith had said the agreement with the WB and the other donors would have to be withdrawn or cancelled before the government made another funding agreement. Senior officials were in talks with WB officials to resolve the impasse.
Sources in the communications ministry said the government might send a letter to the WB in a day or two, scrapping its loan agreement.
"It's not complicated to scrap an agreement. The government can do it if it does not want to take the WB loan and goes for other funding," a senior official said seeking anonymity.
Meanwhile, economists said the Malaysian offer would be costly for Bangladesh, as it would put tougher conditions for providing the fund.
They also said that if it were the World Bank, the government would repay the loan at 0.75 percent interest in 40 years. Moreover, Bangladesh would get a 10-year grace period for paying off the loan.
However, sources in the ministry's Bridges Division described the MoU signing as a major development, saying that this step would open up an opportunity for Bangladesh to get Malaysian funds for the Padma bridge project.
They said a draft of the MoU had been prepared, according to which the two countries agreed to cooperate in the bridge construction.
"After signing of the MoU, we will begin negotiations with Malaysia on some crucial issues like the total cost of constructing the bridge, the time Bangladesh will get to pay off the debt, construction period and toll to be fixed for different vehicles," a Bridges Division official said.
He added that the present government would try to settle all these issues as quickly as possible, so it could start the construction work before the expiry of its tenure. The deal with Malaysia will be finalised only if both the countries can reach an agreement.