Financing Padma Bridge: The way out

The unfortunate decision of the World Bank to cancel the loan for Padma Bridge has saddened all of us. But as a nation we must put the past behind us and learn from it; we need to focus on the present and live it while looking ahead to the future and prepare ourselves accordingly. The past is behind us and we should learn from it: This is not the first time that the World Bank had second thoughts about financing a large infrastructure project in Bangladesh. In 1991, the World Bank decided not to fund the Jamuna Bridge because the Economic Internal Rate of Return (EIRR), (an indicator of cost benefit analysis) for the project was below their hurdle rate. To quote former Executive Director of Jamuna Multipurpose Bridge Authority: "The Jamuna Multipurpose Bridge Project could not see the light of the day for several years because the economists of the World Bank [...] repeatedly calculated and found the rate of return unsatisfactory in the range of 9-12%. Three young Bangladeshi economists [...] looked at the project, came up with a new methodology to calculate increased output in the project area on the assumption that project would remove many of the constraints to production in the rural economy, including agriculture, once it is completed. They showed that the previous assumption had not included these increased output; as such the calculated EIRR was lower than what it should be. The same project was subsequently found satisfactory when some economists in the World Bank were converted to this view." We were able to demonstrate that by allowing for changes in cropping pattern in the North-West region, the EIRR could increase from 0.2% to 1.6% under different scenarios. A-three member delegation from Bangladesh presented our case to the Bank officials in Washington D.C. The World Bank accepted the government's position and decided to move ahead with funding of the project. I must acknowledge that Christopher Willoughby, at that time the Bangladesh Country Director of the World Bank played a very important role. This past experience raises a glimmer of hope that perhaps the World Bank could be persuaded to change its position, provided we take the right steps. However, this time the challenge is more daunting, involving the demonstration of good faith and building a trustworthy relationship. The present is here, live it: With what we had done in the past, we now have to do something to change the minds of the financiers in Washington D.C, Manila, Tokyo, and Jeddah. We do not see any reason to disagree with the finance minister's observation that the allegations may not have been substantiated by standards of Bangladeshi Law. But there is a crucial difference between public service and the justice system. The bottom line for conviction under the justice system is incontrovertible evidence. The bar is much higher in case of public service. This is the reason why the Indian Railway Minister Lal Bahadur Shastri or Bangladesh's Industry Minister Zahiruddin Khan resigned, accepting the responsibility of rail accident or fertiliser crisis, when no one actually blamed them for these incidents. Public Service is a higher calling and thus has much higher standards. A merely negative perception should motivate a public official (including a minister) to accept responsibility and resign. The minister in question and other officials involved, may just respond to this higher calling of public service, resign or retire, and wait for vindication of their claimed position under the ongoing process. What is at stake is much larger than any one person or group of individuals: the reputation of the country, a vital infrastructure, and the aspiration of 60 million people living in the South-West region. Our public officials really owe this to the people of South-West region and the nation at large. We will need a lot of good will -- both at home and abroad -- to recover from the current setback. Would the best known face of the country to the outside world, Professor Yunus, by his own initiative, take up the matter? Could he be persuaded by the civil society and/or the government to carry the brief of the Padma Bridge Project on behalf of the 60 million mostly poor people living in the South-West region? This would certainly add a feather to the cap of the anti-poverty crusader and put all controversy to rest. The future is ahead, prepare for it: Assuming that we are able to sway the opinion of the financiers in our favour to revise their decision, we are not done yet. The Padma Bridge project will now be on the radar of the media, international community as well as the citizens of the country. We should not forget that the Padma Bridge Project is not only a complex project, but also a tremendous project by international standards. Bangladesh needs to put forward a team that is not only beyond reproach, but also competent enough to navigate through the rough waters in the days ahead. The Jamuna Bridge benefitted greatly from the presence of Executive Directors of Jamuna Multipurpose Bridge Authority, A.Z.M. Shamsul Alam, Azimuddin Ahmed, and Abdul Muyeed Chowdhury, during different phases of implementation of the project. Bangladesh Civil Service has honourable men and women who could discharge this duty with honesty and competence, provided they are selected using an apolitical lens. Fortunately for the Padma Bridge Project, Professor Jamilur Reza Chowdhury, the head of panel of experts of Jamuna Bridge is also involved in the Padma Bridge project. Professor Chowdhury has a wealth of experience that the Padma Bridge project could benefit from. We should take the initiative to cooperate fully with any external panel, provide them complete access to all documents and processes, and turn the tables on the World Bank to prove its pro-poor credentials.

The writer is a Professor of economics and finance at North South University and co-author of the book Financing Large Projects.