File photo shows the Jamuna Multipurpose Bridge. The bridge authority in a meeting yesterday expressed its intention to issue only Tk 200 crore bonds in the market. Photo: STAR

A dispute has emerged between Jamuna bridge authority and ICB on how much money will be raised through the securitisation of bridge over the Jamuna River.

ICB (Investment Corporation of Bangladesh), which is responsible for offloading shares of government entities, proposed to the government to securitise Jamuna bridge by issuing Tk 500 crore bonds to be traded on stock markets.

But the Jamuna Multipurpose Bridge Authority (JMBA), which supervises the operational activities of the bridge, at a meeting yesterday expressed its intention to issue only Tk 200 crore bonds.

Sources close to the meeting said the JMBA doest not want to go for Tk 500 crore bonds now.

To resolve the differences the government has formed a committee comprising representatives from Ministry of Communication, Bangladesh Bank, Securities and Exchange Commission, ICB and JMBA to review the proposal prepared by the ICB.

After the meeting, the finance and planning adviser said the committee was also asked to submit a report with recommendations within two months.

As per the ICB proposal, of the total amount of Tk 500 crore, Tk 450 crore will be raised through issuance of bond securitisation in private and institutional placement, while Tk 50 crore will be raised from public.

Securitisation is a structured finance process in which assets, receivables or financial instruments are acquired, classified into pools, and offered as collateral for third-party investment. It involves the selling of financial instruments, which are backed by the cash flow or value of the underlying assets.

Of the money to be raised, Tk 200 crore will be invested as equity for construction of Padma Bridge, while the rest of the amount will be invested in other areas such as building infrastructure and developing tourism.

The ICB in the proposal recommended that the JMBA will raise Tk 300 crore against the security of its future tolls receivable in the next 10 years, while Tk 200 crore will be raised against the security of JMBA's fixed deposit receipt (FDR) worth Tk 200 crore.

The securitised bonds will be offloaded as 'approved security' so that the financial institutions can keep the bonds as statutory liquidity requirement (SLR), according to the proposal.

Jamuna Bridge was inaugurated in June 1998. With a length of 4.8 kilometer and width of 18.5 meter it is the longest bridge in Bangladesh. Around Tk 3900 crore was spent on construction of the bridge.

Revenue from the bridge was Tk 107 crore in 2001-02, Tk 170 crore in 2002-03, Tk 160 crore in 2003-04 and Tk 180 crore in 2004-05, according to sources. Of the income, 70 percent came from toll collections.