Bridges Division begins repayment of Padma Bridge loan

The Bridges Division on Wednesday began the repayment of the loan it took for the Padma Bridge construction from the revenue it earned as toll collection from the bridge.

Road Transport and Bridges Minister Obaidul Quader handed over a cheque worth around Tk317 crore to Prime Minister Sheikh Hasina as the first and second instalments of the loan.

"Padma Bridge is not just an infrastructure. It is a symbol of pride for Bangladesh," Prime Minister Sheikh Hasina said at the cheque handover event.

She praised the bridge minister and the Bridges Division for being able to repay the loan from the bridge's toll earnings.

"I believe we can step forward by confronting any hurdle if the people stand beside us. The construction of the Padma Bridge with our own finance is the best example of it," BSS reports, quoting the prime minister.

The prime minister said her government has built the Padma Bridge with its own finances, taking it as a challenge as the World Bank had suspended loans to construct it. The WB was followed by some other organisations.

She thanked the people for supporting her government wholeheartedly in constructing the Padma Bridge with the country's own finances.

The prime minister hoped that the entire nation would join hands with the government to continue the country's advancement as they did in constructing the Padma Bridge, BSS reports.

The prime minister sharply criticised those who think Bangladesh cannot prosper without the help of others.

"But we have proved the capability of Bangladesh by constructing the Padma Bridge with our own finances and earned global dignity and honour," she said.

She also said that the Padma Bridge is not just a bridge but a symbol of the pride and capability of the nation.

To construct the Padma Bridge, she said, Bangladesh had to overcome many national and international hurdles.

"We can now repay the loan taken for the Padma Bridge construction from the toll collected from it," she said.

Prime Minister's Principal Secretary M Tofazzel Hossain Miah conducted the event at Ganabhaban. Former cabinet secretary Khandker Anwarul Islam spoke on the occasion.

Governor of Bangladesh Bank Abdur Rouf Talukder, Finance Senior Secretary Fatima Yasmin, and Bridge Division Secretary Md Monjur Hossain were also present.

Financing the Padma Bridge construction

The total cost of constructing the bridge with domestic financing amounted to Tk30,193 crore. The government provided a grant worth Tk300 crore and provided the remaining Tk29,893 crore as a loan with a 1% annual interest rate, according to Bridge Division officials.

In line with an agreement with the finance division on 29 August 2019, the Bangladesh Bridge Authority (BBA) will repay the loan in 35 years through 140 instalments (four instalments each year). The repayment will continue up to the fiscal year 2056-57.

According to the schedule, a minimum of Tk634 crore to a maximum of Tk1,475 crore should be paid every fiscal year. 

The amount paid on Wednesday includes principal and interest on the loan taken from the Asian Development Bank (ADB) for the design of the bridge, said Bridge Division Secretary Md Monjur Hossain.

He told The Business Standard that half of the payable liabilities in the current financial year of the Padma Bridge project have been repaid. 

"We have to make another two instalments for the current fiscal by June 30. The bridge authority will be able to pay the amount depending on sound toll revenue," he said.

Altaf Hossain Sheikh, director (Finance & Accounts), BBA, told TBS that the ADB loan for design is SDR 17.45 million equivalent to Tk215 crore.

The maturity period of the loan is 20 years, including a grace period of 5 years. The loan is to be repaid in 60 instalments, four each year.

On 25 June 2022, the prime minister inaugurated the country's largest 6.15-km Padma Bridge over the Padma River.

The authority collected tolls worth Tk610.28 crore till 4 April. The government has a plan to increase the toll rate by 10% every 15 years. 

Apart from this, the bridge authority will pay VAT and income tax at the advised rate on the toll revenue.

The Padma Bridge is expected to last more than 100 years, but its construction cost will be recovered in the next 35 years.