World Bank expresses doubt over timely completion of Bangladesh megaprojects

The World Bank has expressed doubts about the timely completion of Bangladesh government’s priority projects because of ‘inadequate allocation’ in the new budget.

Chief Economics Correspondentbdnews24.com
Published : 22 June 2016, 03:13 PM
Updated : 22 June 2016, 06:25 PM

The bank’s Dhaka office Lead Economist Zahid Hossain made this observation on Wednesday while evaluating the new budget proposals three weeks after their announcement.
 
“The government has taken the initiative to implement fast-track projects. This is certainly praiseworthy. But barring the Padma bridge and the first phase of the Rooppur nuclear power plant, the progress of the other projects has been rather slow – less than 10 percent.
 
“Allocations in the new budget are insufficient. If work on the projects progressed with small funding, their completion time will stretch considerably,” he said.
 
Hossain said 32 percent of the Padma bridge work had been completed, and an allocation of just over Tk 6 billion for the year would prolong the work by another three years.
 
There had been little progress in the bridge’s rail links, he said, and added that with an allocation of Tk 4.1 billion, it would take over eight years to complete.
 
The World Bank says it would take about six years to complete the Maitree Super Thermal Power Plant (Rampal) and 15 years to have the Matarbarhi power plant in place with the proposed allocations.
 
About the Metrorail, Zahid Hossain said it would take over nine years to finish the project with an allocation of Tk 2.2 billion.
 
The feasibility study of the Rooppur nuclear power plant would take another year or more, he felt.
 
The Bangladesh Atomic Energy Commission signed a contract with Russia’s Atomstroyexport on Dec 25 last year for the construction of the country’s first atomic power plant in Pabna’s Rooppur.
 
The first unit of the plant, to be built at an estimated cost of $12.65 billion with a 50-year lifespan, is scheduled to be commissioned in 2021.

Hossain foresaw delays in the completion of the Dohajari-Cox’s Bazar-Ghumdum railway by 30 years and the Payra seaport by four more years as well.

“The projects are crucial to Bangladesh’s economy. It’s a challenge for the government to execute them on time. For that, greater allocations are needed,” he said.

Finance Minister AMA Muhith announced a Tk 3.41 trillion budget on Jun 2 with special sums earmarked for big projects.

The budget is expected to be passed on Jun 30.

At the press conference held at the World Bank office in Dhaka, Zahid Hossain said Bangladesh’s overall economic outlook was good.

He cited tolerable inflation, robust exports, growing foreign exchange reserves, and dipping bank interest rates as positive indices.

Bangladesh has been maintaining a 6.5 percent GDP growth on average over the past few years. Hossain said it was important to have big budgets to keep up the trend.

“Big budget is not a problem. The problem lies in quality implementation,” he said.

He also felt deficits and loans were no cause for worry, given a “$20 billion foreign help in the pipeline”.

But he described as a challenge a 37.5 percent increase in revenue collection target.