Rehabilitation of Padma Bridge Project.The term Rehabilitation can be refer as the restore (someone) to health or normal life by training and therapy after imprisonment, addiction, or illness: helping to rehabilitate former criminals, restore (someone) to former privileges or reputation after a period of disfavor: with the fall of the government many former dissidents were rehabilitated, return (something, especially a building or environmental feature) to its former condition. But in case of Padma Bridge project, the rehabilitation means the improvement initiatives taken by the proper authority to make the project successful by eliminating all the negative aspects and give proper treatment to this project by taking the consent and advise of the wise and specialist on this matter.The year 2009 begins with a significant event dominating the media - the Long Span and Specialty Bridge Group has secured another major win, in the form of Padma Bridge, a 5.58 kilometre-long river crossing in Bangladesh. In a joint bid involving significant efforts across regions, staff in Hong Kong worked closely with colleagues in New Zealand and Australia; the collective efforts culminating in a very high-profiled win of the design of this US$1.5 billion bridge project.The government in the last three years nearly completed all primary works for the project like land acquisition, rehabilitation and resettlement spending around Tk 1,500 crore. It, however, failed to start construction of the bridge. On June 26 this year, the government floated tender for construction of the main bridge and asked the pre-qualified firms to submit bids by November 4. Later, the deadline was extended till December 19. The estimated construction cost of the main bridge is Tk 11,829 crore. The government approved proposals for building physical infrastructure for four rehabilitation centres for the people who would be affected for acquiring land of the Padma Multipurpose Bridge project. Under the project, a joint venture of MRM and ARK will set up physical infrastructures that include roads, schools, mosques, markets and facilities for civic amenities under the rehabilitation project in Zajira under Shariatpur district at a cost of Tk 221 million.

Khan Sons Bangladesh Ltd will set up the same kind of infrastructures in Sheebchar of Madaripur at a cost of Tk 206 million.

MEC and PNL Consortium will build two rehabilitation centres in Munshiganj at a cost of Tk 221 million and Tk 237 million respectively.

The government plans to build the US$2.4 billion Padma Multipurpose Bridge by 2013. A total of 15,000 families may be affected for the 6.5-kilometre-bridge, the longest in the country.

A total of 60,000 tonnes of wheat will be bought at a cost of Tk 897 million. Prices of wheat have been fixed US$294.9 per tonne.

The ministry will also buy 50,000 tonnes of atap rice at a cost of Tk 1.28 billion with each tonne costing $369.5, said the cabinet official adding that Bangkok-based Messers Phoenix Commodities Private Ltd would supply the staple food.

For the rehabilitation of the project we need to know the history of this project:History of Padma Bridge in Brief:

The first pre-feasibility study for the Padma Bridge project was conducted in May-October 1999. Detailed studies were conducted from May 2003 to May 2005 and a PCP was placed at the ECNEC in June 2005. Further studies were done and financing options were explored until the ECNEC approved the Padma Multipurpose Bridge Project worth Tk. 10,166 crore (Donor- GoB ratio 68:32) on August 20, 2007. The past caretaker government initiated the design work of the project with the financial assistance of the Asian Development Bank. In January 2009, the government decided to appoint a consulting firm for the design work. The Bangladesh Bridge Authority (BBA) invited the pre-qualification tender for the project in April 2010. The Padma Bridge Project was revised on January 11, 2011 with the estimated cost raised to Tk. 20,507 crore and the Donor-GoB ratio changed to 79:21. GoB concluded loan agreements worth US$2.3 billion with four development partners (DP) in early 2011. An agreement for $1.2 billion was signed with the World Bank on April 28, 2011. Loan agreements were also signed with the JICA on May 18 for $ 415million, with the IDB on May 24 for $ 140 million and with ADB on June 6 for $ 615million. Construction of the bridge was expected to commence by early 2011and be ready for major completion by 2013 (and complete all sections by late 2015).

After fixing all formalities, when everything was set to begin the construction of the bridge, on June 29, 2012, the lead donor, the World Bank, decided to cancel its $1.2 billion IDA credit alleging corruption in rewarding a contract to a Canadian firm. As the whole nation was stunned by the decision of the WB, the government denied allegation of corruption charges and vowed to fund the bridge through alternative means. The government has laid out plans to mobilise resources, including levying surcharges and issuing sovereign bonds. Different ministries have been instructed to slash development projects and divert the money to fund the Padma multipurpose bridge, a key election pledge of the government.

Possibilities of Padma Bridge Project

The Padma River carries the third greatest water discharge of all the rivers in the world but it is ranked as the highest in terms of sediment transport and is one of the largest and most challenging river for which bridge construction has been attempted.Some positive aspects of this project are:

The 5.58 kilometre-long river crossing will be South Asia's largest. Padma Bridge will connect the southwest of Bangladesh with the capital Dhaka, cutting travel times by several hours

boosting business through the movement of goods including carrying a railway planned for connection to the Trans-Asian network, communication infrastructure and a gas transmission pipeline. Once completed, government officials estimate that the new bridge will increase Bangladesh's Gross Domestic Product (GDP) by 1.2 percent.

RecommendationsThe construction of bridges in Bangladesh has never been an easy affair nor has it been without controversies. Funding has always been a central problem along with inordinate delay and corruption. Heavy dependency on foreign funds compounded with crude conditionalities remains the prime reason behind all these delays and controversies as well as corruptions. Of late, funding the Padma bridge has given rise to such a controversy. A debate on self-financing the bridge has also followed. Some options are opened before the authority to take, such as: Securitisation of revenues emanating from the Bangabondhu (Jamuna) BridgeUnder this arrangement private financial intermediaries (PFI) may offer a loan to the Bangladesh Bridge Authority (BBA) against the revenue stream from the Jamuna Bridge to be securitised. The PFI can then sell or assign this loan to the special purpose vehicle (SPV) which would issue the fixed income securities to finance construction of the Padma Bridge.

IPO/bond issuance by a special purpose entity/companyGiven that the capital market is vibrant, the Jamuna Multipurpose Bridge Authority (JMBA) has accumulated around Tk 900 crore in toll revenues in its account. Likewise, the Padma bridge will also generate enough traffic and toll revenues. It is therefore possible to inject the toll revenue from both Jamuna and Padma bridges into a special purpose entity/company, which carrying a high level of credit worthiness, can act as the financing vehicle for the Padma bridge project. It can leverage new capital for the development of bridge by issuing bonds or launching IPO in domestic capital market. However, the bond market has been an uncharted territory for Bangladesh as the country has never floated such sovereign bonds before. At the country's current credit ratings, the interest rates on bonds are likely to be just under 7%. Again, this is a lot more than what the country would have to pay back to the World Bank for the bridge loan. Bangladesh would have to be careful by avoiding a Greece or Spain situation where the burden is passed on to the poor and the middle class.

Joint venture with/local foreign investors:Under this mechanism, a local/foreign investor (even the GoB may inject Jamuna revenue into this joint venture) purchases a certain percentage of the entity in cash in turn for a fixed concession period to receive a portion of the project cash flows. Typically, the investor receives a higher percentage of cash flows during the early years of concession until its equity investment is fully paid off. Then it receives a lower percentage of cash flow until local partner has its equity interest paid in full. However, such financing option is relatively expensive since any foreign investor is expected to pay its portion upfront and requires a higher rate of return. Build Own Operate and Transfer (BOOT)The concessionaire will construct the bridge, secure necessary financing and operate, manage and maintain the toll, collect revenues and transfer the facilities back to the government at the conclusion of the concession period. The main advantage of BOOT is that the government has no funding responsibilities; the disadvantage is that the government loses control over the assets for the concession period. The project may also not attract private investors, unless the toll is set high, which would then deny the bonafide benefits of the bridge to the users. In this context the financial return of the Padma Bridge would be low.

The government, however, is mulling four options for implementing the Padma bridge project.

1. by reviving the WB-led arrangement for the $2.3 billion credit from the above-mentioned four development partners.

2. by implement the project through a new consortium of the ADB, JICA and IDB.3. by floating fresh tender and the successful bidders will have to finance a part of the project.

4. by constructing the bridge with the government's own resources if other options do not work.

ConclusionThe Padma Bridge is the most challenging engineering project with one of the deepest foundations in the world. Each level of the project's development was done with lots of discussion and cross checking. It is viewed as a very important infrastructure towards improving the transportation network and regional economic development of the country. The bridge has provisions for rail, gas, electric line and fiber optic cable for future expansion. According to the latest structural design the two-level steel truss bridge will carry a four-lane highway on the upper level and a single-track railway on a lower level. The project will include a 6.15 km long and 21.10 m wide bridge, 15.1 km of approach roads, toll plazas and service areas. Once this mega project is completed, travel among all the major divisions and cities between the two sides of the river will be easier and faster. The importance of this bridge can hardly be overemphasized. Therefore, the government must think it over all again and should come up with the most pragmatic plan for funding this project.