KL proposal has several loopholes

The latest Malaysian proposal to finance the Padma bridge project has "several gaps" for which the communications ministry has yet to determine exactly how much investment Bangladesh will seek, sources in the Bridges Division told The Daily Star.
"There are many gaps in the proposal like the previous ones. We need clarification from them before spelling out a figure," said a source, referring to past Malaysian proposals which were all shelved due to lack of clarity or substance.
In its proposal submitted on Sunday, Malaysia wants to build, own, operate and transfer (Boot) the 6.15-kilometre bridge prioritising its own profit rather than providing services, which is something new in Bangladesh.
Malaysia proposes to build the bridge in three years and operate it for 35 years to return the capital and profit before transferring it to Bangladesh.
The country's other bridges, including the Jamuna Bridge, was constructed on the basis of Boot. Bangladesh owns and operates the Jamuna Bridge. It also pays back loans to donors from the money collected as toll.
Speaking anonymously, an official of the Bridges Division said the proposed interest rate on Malaysian fund would exceed 6 percent, whereas the World Bank interest rate was just 0.75 percent.
Malaysia also seeks high tolls from user vehicles, although this is an issue that is supposed to be determined by Bangladesh on the basis of the total cost of the project and projections of vehicular movement.
The proposal quoted very high prices for the construction of the main bridge and approach roads, and river-training component in a very unclear manner, the sources added.
Earlier, the government, along with the project's consultant, set the total cost of the bridge at $2.9 billion, including $1,200 million for the main bridge, $650 million for river-training and $180 million for approach roads.
Malaysia also demands that all procurements be made tax-free.
Under the proposal, Malaysia will form a consortium to collect funds in which the Malaysian group Axisjaya will be in the lead. The Korean company Samsung, a pre-qualified firm in the Padma bridge project, will be assigned to construct the bridge.
According to its website, Axisjaya has built military camps and houses, but there is no mention of bridge construction on the list of its project gallery.
"We are in continuous touch with Malaysian officials to overcome the inconsistencies," said a senior Bridges Division official, asking not to be identified.
He however termed the latest Malaysian proposal a "draft final proposal", not the final proposal due to its "inconsistencies". The Bridges Division could not also prepare a summary of the proposal due to its "inconsistencies", he added.
Sources in the communications ministry say the Bridges Division will prepare a summary of the Malaysian proposal in the next two days. The summary will be submitted to the government's high-ups for further decision in this regard, the sources add.
The construction of the Padma bridge, the highest political commitment of the ruling Awami League, has become uncertain after the WB cancelled its $1.2 billion soft loan in June this year.
The government has already spent Tk 1,500 crore for the design of the bridge, land acquisition, rehabilitation and resettlement of the affected people in Mawa and Janjira points.