Published in The Financial Express on Thursday, 3 June 2016
Special focus on 10 mega projects to boost investment
The government has given special focus on ongoing mega development projects as it has provided for yearly required fund allocations to complete the works in due time.
The budget document said the government has allocated total Tk 446.3 billion or 40.32 per cent of the Tk 1.107 trillion annual development programme (ADP) outlay for 61 large and fast- track projects of seven ministries and divisions in the next financial year (FY) 2016-17.
The government has also described the implementation status of 10 fast-track mega-projects of the country saying those would bring the country’s economy to a new height.
The document said the government has given Tk 187.27 billion fund allocations for eight out of total 10 fast-track mega-projects. The allocation is 17 per cent of the Tk 1.107 trillion ADP for the next FY2017.
The estimated total cost for the 10 projects is Tk 3.40 trillion, or nearly $43.60 billion.
A 91-page book titled, “The mega projects in structural change: new dimension in growth acceleration” has provided the detailed picture of each of the projects too including starting and completion dates, latest implementation status, their economic impact and sources of financing.
According to the book, the eight fast-track projects would get an allocation of total Tk 2,032 billion in their project-cycle next year to complete their physical works.
A Planning Commission official said the number of mega projects may increase in the coming years and the implementation status of the existing projects will be presented next fiscals too.
Except the Padma multipurpose bridge project, all other projects are being financed by bilateral and multilateral partners such as China, Japan and the Asian Development Bank.
The Tk 287.93 billion Padma bridge project is being built with the government’s own funds.
The 10 fast-track projects are the Tk 287.93 billion Padma Multipurpose Bridge, Tk 349.88 billion Padma Bridge Railway Link, Tk 183.04 billion Dohazari-Cox’s Bazar-Gundum railway line, Tk 219.85 billion MRT line-6, Tk 11.28 billion Pyra seaport development, Tk 50.87 billion Rooppur Nuke power plant (phase-1), and Tk 359.84 billion Matarbari coal-fired power plant and Tk 149.99 billion Rampal power plant, the LNG terminal set up and Sonadia deep seaport projects.
Mr AMA Muhith in his budget speech Thursday said all the mega projects would have a huge impact on the economy.
The LNG terminal project is expected not only to diversify the country’s primary energy sources but also ensure that the gas-based industries and installations do not face a sudden death in the near future.
However, the project has not started in the last six years.
Major infrastructure projects have a history of problems in Bangladesh, such as cost overruns, delays, failed procurement and unavailability of private financing.
He said the progress of each mega project would be monitored closely so that delays do not occur.
Development researcher Dr Zaid Bakht told the FE the government’s initiative on the fast-track project would give a positive signal to the private sector investors.
“Since the private sector investment is almost stagnant over the years, the special emphasis of the government for the quality investment in the infrastructure development might be able to attract local and foreign investors,” he said.
CPD’s Additional Director Dr. Khondaker Golam Moazzem stressed the need for speedy and quality execution of the ADP.
According to the economist, public investment in mega projects is growing fast. But many of those are taking more than their estimated time to complete. “And with time, their costs too are rising,” said Dr Moazzem urging the government to look after the debt payment situation in case of foreign financing.
He also agreed on mid-term impact of the projects on the country’s overall economy and termed the next fiscal as a test year for the government to spur private as well as foreign investment.