The Padma Bridge Rail Link Project (PBRLP) is facing a funding crisis, according to the Chinese contractor. Due to paucity of funds, China Railway Engineering Company (CREC), the contractor for the project, is now facing difficulties in completing the project on time.
The contractor, China Railway Engineering Company(CREC), said in a statement to the media on Wednesday (February 24).
The Bangladesh government plans to inaugurate the Padma Bridge and its railways on the same day. But now the funding crisis has hampered the smooth implementation of the entire project.
According to the CREC data, they received the initial payment (mobilization payment) at the end of June 2018. But due to internal complications of Bangladesh Railway, they did not get any more money till last September. In the long run, CREC borrowed large sums from various banks to keep the project afloat.
According to CREC, it has taken much longer than expected for Bangladesh Railways to complete each interim payment (IP). For example, they said, CREC submitted IP Seven for project expenses for the June-September quarter of 2020 on October 27, 2020. But Bangladesh Railway delayed till February 9 this year to give instructions to China Exim Bank regarding the settlement of foreign part of railway expenditure. On the other hand, part of the domestic expenditure of the project is stuck due to lack of proper planning and coordination of Bangladesh Railway. Since China Exim Bank will not dispose of the overseas portion before settling local expenses, CREC has not received any money for IP Seven despite the lapse of more than 115 days.
The CREC has claimed that they have only received money for the work done till June 2020. Bangladesh Railway is still working very slowly in terms of providing funds for the period from July 2020 to January this year. The total amount in arrears is about 40 crore US dollars. In this situation, it has become difficult for CREC to procure construction materials required for the project work and pay their dues to subcontractors and suppliers on time. As a result, the pace of project implementation has slowed and the cost has been steadily rising.
According to the CREC, Bangladesh Railways has not yet issued any instructions to supply 100 coaches even though it was supposed to supply them by July last year. CREC has repeatedly informed Bangladesh Railway that it will take two years for these coaches to be manufactured and handed over.
Meanwhile, the CREC has been trying to continue the Padma Bridge rail link project as seamlessly as possible through the difficult times of the Covid-19 Pandemic, but sought the cooperation of every stakeholder involved.