Capital market could raise Padma Bridge funds
Monday, 01 September 2008

The government is considering raising a major portion of the cost for construction of the Padma Bridge through the capital market, finance and planning adviser AB Mirza Azizul Islam said Saturday.

Speaking as chief guest at a seminar on the capital market, he stressed the importance of the proposed Padma Bridge for the development of the country.
According to the communications ministry, the total cost for the construction of what will be the country's largest bridge has been estimated at $1.8 billion or Tk 12,500 crore.
"About Tk 4,000 crore will be required on top of assurances of financial assistance from different donor countries and agencies to meet the total construction cost," said Mirza Aziz.
"There are plans to raise Tk 300 crore from securitisation (of tolls and other earnings) of the Jamuna Bridge in the next few years."
The government is thinking of raising the rest of the money from shares in the Padma Bridge, he said.
However, the finance adviser added, the government has not yet taken any final decision in this regard.
An emergency interministerial meeting is set to be held Sunday to select the lead donor from among the development partners interested in financing the Padma Bridge Construction Project—to be attended by the finance adviser, communications adviser and senior officials of the finance and planning ministries and the Economic Relations Division—a finance ministry official told Saturday.
The World Bank, Asian Development Bank and Japan Bank of International Cooperation have jointly assured $850 million for construction of the bridge. The Islamic Development Bank has recently informed the ERD that it will also provide $300 million for the project.
Asked on Saturday whether the cost of constructing the bridge would be met by releasing shares directly in the market or by sale of government bonds, the finance adviser said: "The matter has not yet been finalised. Nothing clear cut can be said ahead of time."
The finance adviser added, however, that shares of other government entities would be floated on the market, in a similar manner to state-run Meghna and Jamuna oil companies and Titas Gas.
On the present make-up of the capital market, the finance adviser said: "Banks and financial institutions dominate our share market. The role of industrial sector is very small."
He urged industrialists to raise funds from the capital market instead of depending on bank loans.
On the recent share-dives in the market, he said: "The share market situation has been going through a bad time for some weeks. However, by the end of the last week, the situation improved slightly. Ordinary shareholders have regained some sense of security."
"The Securities and Exchange Commission has already taken different steps to restore a normal situation in the shares market. But they have been asked to take further measures," Mirza Aziz said.
"The SEC has been asked to formulate a policy to provide compensation to shareholders of any company fined for wrongdoing," he cited as an example.
However, he added that ordinary shareholders must be cautious in their investment choices. He warned them against heeding rumours.
Citibank NA organised Saturday's discussion at Lake Shore Hotel in Gulshan. Citibank managing director and Citigroup Bangladesh country director Mamun Rashid also spoke.

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