Oil savings can fund Padma bridge, says ex-central bank governor Farashuddin

Savings from oil imports can be diverted to fund the construction of the 6.15 kms Padma Multipurpose Bridge, says former Bangladesh Bank governor Mohammed Farashuddin.

He told bdnews24.com in an interview that with oil prices dropping to half their peak global rates. Bangladesh will do well not to revise the retail prices but divert the savings to construction of Padma bridge.
 
“Import cost has dropped sharply and foreign exchange reserve has increased,” he said.
 
“Our worries over funding the Padma bridge can be taken care of as we can build the bridge with the money saved from importing oil,” he added.
 

The former central bank governor said the drop of oil prices in the international market would save at least $3 billion (Tk 240 billion if a dollar sells at Tk 80) a year.

“We’ll be able to build our dream Padma Bridge with this money,” Farashuddin said.

Bangladesh Petroleum Corporation Chairman AM Badridduja said Bangladesh spent Tk 380 billion to import fuel oil in 2013-14 fiscal year.

In this fiscal, the spending would decrease to around Tk 160-170 billion because of dropping prices in international market.

In that case, the government would be able to save around Tk 220 billion this fiscal.  

The total estimated cost to build the bridge is Tk 2.9 billion.

Following a prolonged tussle over the corruption allegations levelled by the World Bank, the government has started to build the bridge with its own funds.

Road Transport and Bridges Minister Obaidul Quader has said 20 percent work on the bridge is complete.

Mohammed Farashuddin suggested that the government should not decrease oil prices in local market.

“The rich of our country use most of the oil. So I would request the government not to cut down on oil prices,” he said.

He also suggested investing the savings in other key industries.

“We can buy more capital machineries and intermediate goods to expand industries,” he said.

BPC Chairman Badrudduja said Bangladesh has fixed a target to import 5.5 MMT of oil in the current fiscal -- 1.3 million MMT crude and 4.2 million MMT refined oil.

He said the price of refined oil has dropped to $66 a barrel from $148 while the price of crude oil has dropped below $50 a barrel.

BPC is making profit by selling oil from January, he added.    

Farashuddin said developed countries have to import labour to maintain growth.

“Bangladesh will get the benefit from this demographic dividend,” he added.

He suggested sending 50 million Bangladeshis capable of earning foreign exchange if developed through vocational trainings.

The central bank’s Forex Reserves and Treasury Management Department General Manager Kazi Saidur Rahman said $350 million has been paid to import materials for Padma bridge’s construction.