Tuesday, February 21, 2012

On Padma Bridge Fiasco

Daily Sun
19 February, 2012
M. Serajul Islam

The Finance Minister’s categorical statement that no MOU would be signed on the 21st of February with Malaysia for financing the Padma Bridge has come belatedly but nevertheless a correct one. The Communications Minister and others in Government had helped build public expectations around Malaysian interest in the project as an alternative to the WB, the ABD and JICA for temporarily suspending financing the mega project on the issue of corruption.

Someone at the higher level of the Government must have forgotten a very simple matter of legal nature related to contracts. In the days we served in the Government, even a Section Officer was knowledgeable enough to know of this huge blunder that this Government committed on the issue of Malaysian funding in the manner it has talked to the media. The Minister of Communications committed a gaffe of the highest order when he called the media to his office and proudly informed that the Government would sign a MOU on the 21st of February with Malaysia on the Padma Bridge project.

Clearly, he was not aware of the legal issues related to international contracts. That he was not aware was flagged by his colleague the Minister of Finance. While talking to the media, he said that the World Bank had unilaterally deferred a final decision on whether or not to finance the Padma Bridge project till July this year. The Minister also said that before Bangladesh could seek funding from Malaysian sources or elsewhere Bangladesh would have to “withdraw or cancel our agreements with the WB, ADB and the Japanese donors”.

The Finance Minister also gave a few details about the Malaysian interest in Padma Bridge Project that also puts the Minister for Communication on a spot. He said that the proposed funding from Malaysia would be under private public partnership (PPP) for which a lot of work would be required to be done before such an agreement is signed. Clearly, the two Ministers have publicly spoken at cross purposes on an important and politically sensitive issue.

The Padma Bridge project is a major election promise of the ruling party. A lot depends on this project for its performance in the next elections. This project had been lying with the donors, meaning the World Bank, the ADB and Japan for a long time. In fact, the previous BNP Government had also strongly pursued this project with these donors and had been helpful in pushing the project in the right direction. Therefore, except for agreeing to details, the project had matured for signing the financing details soon after the AL Government assumed office in early 2009. In fact, the Bangladesh Government and the WB, the ADB and JICA went ahead and signed the project early last year with enough time for it to be started and finished under the tenure of this government.

Hence when the issue of corruption emerged surrounding the project, it came as a very bad news for the ruling party. The charge of corruption of the WB against the Minister of Communications was also very unusual as this was tantamount to interference in Bangladesh’s internal affairs. By coincidence, the same Minister also became involved in charges against him of incompetence in the communication sector of the country. The WB charge and public wrath against him created a surreal situation in governance. The Prime Minister hesitated in removing him; her hesitation later turning into anger against the WB.

Aware of the PM’s anger on the WB, her Ministers and her aides added fuel to the fire. They made disparaging comments of the World Bank. To get on the right side of the Prime Minister, these officials went ahead and congratulated the Prime Minister for her courage and wisdom for daring to stand against the WB that no past Prime Minister of Bangladesh had dared. They also gave statements where they made it appear like there were governments and private donors waiting to finance this project. These officials mentioned Malaysian Government’s interest in financing the project.

Upon becoming the Minister of Communications, Mr. Obaidul Quader started speaking on the Malaysian interest in the media strongly. A Special Envoy of the Prime Minister also visited Bangladesh that raised public expectations. The news was given to the media in a manner to suggest that it is the Government of Malaysia that is interested to finance the project and that the Special Envoy has been sent by the Malaysian Prime Minister to our Prime Minister for this purpose.

The Finance Minister dispelled some of the misconceptions surrounding the Malaysian interest. The offer did not come from the Malaysian Government to the Government of Bangladesh. It has been made under private public partnership that brings with it certain damning issues, one of which is in quality of funding. The World Bank may not be the best of donors in the context of conditions. Nevertheless, it is by far the best in the context of what matters to Bangladesh most. It is the cheapest source of credit with maximum repayment time frame when compared to other donors.

Meanwhile other eyebrow raising facts have come to surface about this Malaysian connection. Malaysia has simply offered to raise the funds and that too in Dubai. The interest rate to be offered would be at market rate well over 10% against WB’s less than 1% rate and repayment period would be much shorter than what WB offers. Also, the Malaysians who are interested to finance the project would be merely brokers in the project and the project would be given to the Chinese for construction. Clearly, in this intransparent and complicated process, the project would not only be delayed but its costs would also be enhanced substantially.

The only rational course for the Government should have been to remove the Minister of Communications from the Cabinet that would have satisfied the WB to resume the funding for the Padma Bridge Project that it held up primarily on account of him. It would also have satisfied the people who were asking for his removal on separate issues that would have helped the ruling party politically. By changing his portfolio, the Government accepted the WB’s allegations of corruption against him but by keeping him in the Cabinet; it has discouraged the WB to agree to withdraw its temporary objection to fund the project. In the process, the Government’s hard to understand decision with the Minister also irritated the ABD and JICA that have agreements with the Bangladesh Government to co-finance the project and have fully endorsed the stand of the WB on the issue. All in all, by some strange and poor handling, the Government has made a mess of a very important economic infra-structure project.

The mess over the Padma Bridge is also another example of the well known lack of coordination among the Ministers of this Government. If the Minister of Communications had talked with the Finance Minister, the latter would have told him about the legal problem of signing a MOU with Malaysia without annulling the agreement with the WB. It now seems that the former did not even consult his own Ministry as many in the Bridges Division under him have spoken to the media on condition of anonymity about it. Also, it is strange why the Finance Minister waited this long to speak publicly about the folly of the Minister of Communications. The Ministers of this Government make mistakes galore because of their eagerness to make the Prime Minister happy or fear to tell her the hard truth. In the process, all they do is lower the credibility of this government as well as embarrassing it routinely.

At the time of filing this piece, the Communications Minister, challenged by the Finance Minister, has stated that all uncertainties over the Padma Bridge would go in a month. Are the Ministers playing some sort of a game? Cleary governance is becoming eerie!

The writer is a retired career diplomat and former Ambassador to Japan.

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