Dhaka signs major bridge funding deal with Malaysia

Dhaka: Bangladesh on Tuesday signed a landmark agreement with Malaysia to finance the country's largest multi-purpose bridge amid a stalemate over World Bank funding following graft allegations.

The governments of Bangladesh and Malaysia signed a Memorandum of Understanding (MoU) on cooperation in the construction of the Padma Multipurpose Bridge and associated facilities including other infrastructure projects in Bangladesh on Tuesday in Kuala Lumpur, an official statement said here.

It said Malaysian Prime Minister Dato' Sri Mohammad Najeeb Bin Tun Abdul Razak witnessed the signing and later talked to his Bangladesh counterpart by phone when "they termed the event as historic and a landmark development".

Partnerships

Under the deal, signed by Bangladesh Communication Minister Obaidul Quader and Malaysian special envoy to India and South Asia on Infrastructure, Dato' Seri S. Samy Vellu, authorised Malaysian public or private sector agencies or companies with "sufficient experience would arrange, mobilise and invest at least $2.3 billion (Dh8.44 billion) to construct the bridge".

The World Bank earlier promised to provide $1.2 billion of the $2.93 billion project, but suspended the disbursement process after raising the graft allegation as the construction was initially planned to start by this year and be completed by the end of 2014 to connect southern Bangladesh with the capital Dhaka.

Bangladesh earlier short-listed five firms for appointment as consultants including Canada's SNC-Lavalin Group Inc, but the World Bank suspected corruption in the process and instead of approving the list, referred the matter to Canadian authorities to investigate how the Canadian company got itself short-listed.

Bangladesh's Anti-Corruption Commission (ACC) in February formally absolved former communication minister Syed Abul Hussain of graft allegations involving the project, saying it found no evidence of malpractice in appointing the contractor for the project as alleged by the World Bank.

Under a cabinet reshuffle, Prime Minister Shaikh Hasina, however, changed Hussain's portfolio and made put him in charge of Information and Communication Technology recently.

Hasina earlier warned her government would not accept World Bank funds for the mega project unless it could prove the allegations.

Investigation report

The global lending agency has said it was awaiting an investigation report on graft allegations.

But the MoU with Malaysia came a day after Finance Minister A.M.A. Muhith said talks with the World Bank would continue and the deal with Malaysia was just an alternative plan.

Before flying to Kuala Lumpur, Communications Minister Obaidul Quader said, "The talks would be for financing the second Padma Bridge project."

Malaysia earlier this week formally offered financing for the construction of the Padma Bridge as a special envoy to the Malaysian premier met Quader for the proposal.

Officials said companies from various countries, including South Korea, Indonesia and China, have shown their interest in funding the construction after the project was stalled five months ago amid the World Bank's allegations, but Malaysia was the first country to make a formal offer.