Economists fear negative impact

Cancellation of World Bank funding for the Padma bridge project over alleged corruption in it would have a negative impact on the global donors' perception of Bangladesh. And it would put to question credibility of the government's project implementation process, some economists said yesterday. Prof Wahiduddin Mahmud said, “The government must now come out with a clear, credible and transparent account of what has happened, just a blame game will not do.” The renowned economist told The Daily Star, "Otherwise, credibility of the government's entire project implementation process will be in question in the eyes of the people and the global actors.” The WB action would negatively impact the country's relationship with the international donor community, he said. Of the $2.9 billion estimated cost of the project, the WB had agreed to loan $1.2 billion at only 0.75 percent interest. Padma bridge is not only Bangladesh's largest ever project but also the WB's single largest one. Wahiduddin said the government should be cautious in negotiating alternative sources of finance since the cost and the associated risks of financing such a large project will depend on the terms that it can negotiate with the foreign financiers. “This will not be easy. We must not hastily enter into a deal just because this was an election pledge (of the ruling Awami League)," he added. Asked about the WB decision, Ahsan H Mansur, executive director of Policy Research Institute, a private think-tank, termed the development an "unfortunate event". “Now the country's biggest ever project has become uncertain over governance crisis,” said Ahsan, who served the International Monetary Fund for over 27 years. He also hinted that other donors may also keep away from funding the project. As a former top IMF official, Ahsan pointed out that donors always want to see their funds utilised in a transparent manner, and he sees nothing wrong in it. About the alternative funding proposals like the Malaysian one, he said it would be very costly. Prof Mustafizur Rahman, executive director of the Centre for Policy Dialogue (CPD), said he doesn't think cancellation of funding the Padma bridge project will affect future engagement with the WB. But he is concerned at the delay in implementing the project, and likely escalation of its cost. The project will still attract both local and foreign investors, said Mustafizur.