Padma Bridge work on full steam

Work is on in full swing on Bangladesh's dream project , the 6.15 km Padma Bridge .

Construction is in progress with domestic financing and payment for imported material costing around Tk 25 billion have already been cleared.

Even after settling the import bill, the central bank still has a dollar reserve of around 22 billion earmarked for the bridge..

After complication with World Bank funding, which stalled the project for a few years, Bangladesh decided to fund the project from its own resources.

Once the country’s dollar reserves crossed the 22 billion mark, Finance Minister AMA Muhith announced that it was just the right time to commence the project work.

“We have started implementing our dream project at a time when we have sufficient foreign exchange reserves. The central bank would be in a comfortable position even after settling the project’s import bill,” Muhith told bdnews.com24.

“We want to create history by showing the world that we can build the bridge with our own funds.”

The minister said: “The Padma Bridge is no longer an unattainable dream. It is now as real as broad daylight. Massive work is on. The bridge will be thrown open for vehicular traffic in 2018.”

The general manager of the Forex Reserve and Treasury Management wing of the Bangladesh Bank, Kazi Saidur Rahman, told bdnews24.com that it had paid out $300 million (Tk 25bn) for the essential purchases of the project.

“Almost the entire amount has been arranged by the Agrani Bank, which is providing the foreign exchange for the Padma Bridge project.”

With international oil prices falling almost by half, foreign exchange outflow has been reduced for Bangladesh. Under the circumstances, arranging foreign exchange for the project would not be a problem, feels Saidur.

But he also clarified that the central bank was not directly paying the project’s import bills. “The banks concerned buy the foreign exchange from the central bank, which only coordinates the payments.”

The payment procedure for the project was the same as the one for all other imports, he said.

Project Director Shafukul Islam said soil testing for the main bridge’s piling work was currently in progress. Alongside, steel fabrication work was being done in China’s Nantong workshop.

The job of placing the test piles would begin in February, and once the workshop is set up within the project area the work of piling and steel fabrication would be done there, he said.

“So far, 15 to 20 percent of the project work had been done,” Shafiqul said.

If all goes according plan, the 6.15km bridge will be thrown open in 2018. It will connect 19 south Bangladesh districts with Dhaka. Trains will also run on the bridge.

The project has been allocated Tk 81 bilion in the 2014-15 financial year.

$21.84 billion forex reserve

Foreign exchange reserves reached almost 22 billion dollars in the first week of January, surpassing all previous records.

The reserves touched 21.84bn dollars following a spurt in expatriate remittances and export earnings.

Drop in global oil prices also scaled down Bangladesh's foreign exchange outgo on enerhy imports.

The current reserves can take care of import bills for seven months at three billion dollars per month.

In the first six months of the current financial year, remittance increased by 10.3 percent over the same period in the previous fiscal.

Expatriates sent slightly over $710 million between Jan 1 and 6.

On the other hand, export earnings rose by 1.56 percent in the July-December period.

Taka stronger

The taka has become somewhat stronger with a greater a supply of dollars following the increase in export earnings and remittances.

The taka stood at 77.80 to a dollar at the inter-bank currency market on Sunday. On Jan 15, it was Tk 77.95 to a dollar.

$1.48 billion bought in six months

The Bangladesh Bank has bought $1.48 billion in the current financial year so far to stabilise the market .

On the other hand, it had sold $357 million dollars towards the end of last year due to an increase in the demand for the currency following a rise in imports. In Nov, it sold $70million dollars, and in Dec 287million.

The central bank has maintained the past trend of buying dollars from the market till September in the 2014-15 financial year.

Buying stopped since October, as there were no sellers.

It sold dollars in November and December to keep the market stable in the face of rising demand but has renewed buying following a surge in supply.

Earlier, in the 2013-14 financial year, the central bank had bought $5.15 billion. In the 2012-13 financial year, $790 million dollars had been purchased.

The dollar had risen to Tk 85 to a dollar in 2012. It began dropping after that, sliding below Tk 80 in January 2013.

Towards the end of October 2014, the dollar value fell to Tk 77.40, recovering slightly to Tk 77.95 subsequently.

Saidur Rahman said the central bank was closely linked with the money market and had taken necessary steps to stabilise it.

“Dollars are being bought and sold when needed. Everything is being is done to keep the market stable,” he said.

Floating currency rates had been introduced In Bangladesh in 2003, leaving it to the market to determine the exchange values.