Bridge Authority gets prepared to pay back Padma bridge loan

As Padma Multipurpose Bridge is getting closer to opening next year, Bangladesh Bridge Authority (BBA) has requested the finance ministry to prepare a loan repayment schedule for them to start repaying outstanding on a quarterly basis.

The Bridge Authority will have to pay the finance division of the finance ministry Tk 29,893 crore plus accumulated interest that has not been estimated yet, officials said.

The bridge authority recently sent a proposal to the finance division expressing their intention to start payment instalments over the two-tier, much complicated and incredibly time-consuming bridge, from next year.

The BBA also wants to break down the ADP loan worth $ 27.60 million or Tk 2,210 crore which the BBA used to design the bridge.

"We are changing the earlier schedule that we had prepared to repay the government and ADB loans,” a senior finance ministry official told Business Insider Bangladesh, requesting anonymity.

After preparing the Padma Bridge loan repayment schedule, the finance division will take the approval of Finance Minister AMA Mustafa Kamal. The bridge division had signed the debt and liability contract with the finance division after the Padma Bridge project took off.

An official of the finance division said as the bridge opens to traffic, the project will start earning money under various heads such as toll, gas supply pipeline, and plying of trains.

According to an estimate by Bangladesh Inland Water Transport Corporation (BIWTC), some 24,000 vehicles will use the bridge every day. It is expected that around Tk 4.50 crore would be collected as toll on a daily basis.

BIWTC says initially some 2,000 vehicles will pass through the bridge, paying a maximum toll of Tk 29 lakh, daily.

The Padma bridge is being constructed entirely with government funds. The ministry of finance had provided a loan of Tk 29,893 crore to the Bridge Authority. As per the loan agreement, the bridge authority will have to repay the entire amount including interest to the finance division in 35 years from the income of the bridge.

But as toll collection estimation does not match with the reality, it is feared that loan repayment could not be done in the stipulated time.

The bridge authority says that under the current circumstances, it may take seven to eight more years for them to be able to start reimbursement.

Out of the projected 24,000 vehicles that will use the bridge in 2022, trucks will comprise 10,244. The number of buses and light vehicles is 8,238 and 5,472, respectively.

If things progress as planned, a toll worth Tk 133.66 crore will be collected per month and Tk 1,603 crore per year.

Referring to the estimates done by BIWTC only on the Mawa-Jajira river route, an official of bridges division said vehicles currently plying along the Paturia-Daulatdia and Bangabandhu Bridge routes will be using the Padma Bridge.

As a result, the actual collection of tolls will be a little higher than the 2022 projection.

The BBA says according to the agreement made with the finance department, a loan of Tk 596.88 crore will have to be repaid in the first year of the commencement of the movement of vehicles.

The instalment will gradually increase and in some years it will go up to Tk 1,415 per year.

Besides, various other expenses including maintenance and operation of the bridges, river management works, payment of VAT and taxes have to be met from the toll revenue.

Secretary to the bridges division Abu Bakar Siddique said the problems of repayment will not be resolved anytime soon.

“Currently, vehicles using ferries get across the river once a day. But, after the opening of the bridge, vehicles may use it multiple times a day, boosting the revenue,” he told Business Insider Bangladesh on Thursday.

The bridge connects Louhajong, Munshiganj to Shariatpur and Madaripur, linking the south-west of the country, to northern and eastern regions. Padma Multipurpose Bridge is considered to be the most challenging construction project in the history of Bangladesh.

The two-tier steel truss bridge carries a four-lane highway on the upper level and a single-track railway on a lower level. The bridge with 150.12 m (492.5 ft) long 41 spans, 6.150 km (3.821 mi) total length and 22.5 m (74 ft) width, is the longest bridge in Bangladesh and the longest over the Padma (or the Ganges ) river in terms of both span and total length.