Padma Bridge and beyond

There is a concern among some conservative economists regarding escalation of costs of Padma bride construction and also doubt about economic return of the huge establishment. The quantified benefits of the any bridge investment are measured incrementally to the without-bridge case, i.e., those are measured as the difference between the without-project and the with-project cases. The economic analysis considers (1) benefits arising from annual savings in vehicle operating cost (VOC) and travel time to existing passengers and freight crossing the Padma River, and (2) benefits accruing to new trips generated by induced demand. Other types of benefits include the (1) savings in costs associated with operation of the ferry services, (2) capitalized value of service area land, (3) capitalized value of agricultural land to be reclaimed or protected by river training works, and (4) revenue from bridge structure usage fees levied on utilities. The benefits of Padma Bridge, regardless of figures, will contribute a lot to the nation’s economy, and bring changes to the lives of millions of people living in the country’s south and south-western regions.

Padma Bridge will directly connect the 21 districts of the Southern part with Dhaka and its adjoining industrial towns like Narayanganj, Narsingdi and Gazipur. Direct connectivity with Dhaka will expand industrialization, trade, commerce and ease supply of raw materials.

The nation will receive benefits worth more than $10 billion, which is three and a half times more than the construction cost, from the Padma Bridge during its economic life, according to transportation experts, economists and businessmen as they emphasised gaining even more by completing other projects in line with the mega-structure quickly.   The size of gross domestic product (GDP) would increase by 1.23% with the opening of the Padma Bridge. The south-western districts will add another 2% to the GDP. As 2.5% of the $450 billion GDP, more than $10 billion gains will come from the bridge during its economic life. As such, the benefits will be at least three and a half times more than the construction cost.

Immediate impacts of the bridge will include a rise in trade volume and vehicle traffic, as the easier connectivity will reduce transportation costs and time, making businesses more cost effective. According to the Department of Agricultural Extension (DAE), Khulna, everyday around 600 tonnes of agricultural products are sent to the capital from Khulna, Satkhira and Bagerhat. Not only that, the farmers and fishermen of the region will also get fair prices as they will be able to connect directly with the dealers. It will boost the south-western region’s investment to GDP by at least 35 per cent, as well as generate additional employment opportunities for 7.43 lakh people, which equals to 1.2 per cent total labor force, revealed an Asian Development Bank report.

Though there are three seaports in Bangladesh, 90 per cent of Bangladesh’s export-import trade is handled through the Chattogram port, while Mongla Port uses only half its capacity. According to a study, average time taken from arrival of a vessel to release of imported goods at the port is more than 11 days while the time taken to release export cargo is nearly five days. Observers consider the time unaffordably high compared to the standard practices in most countries. Under the circumstances, one of the preferred options is to lessen the load of Chottogram port by upscaling Mongla with improved infrastructure and logistics. 

As communication distance from Dhaka to Mongla has reduced after the opening of Padma Bridge -- now 170 kilometres as against 260 kilometres between Dhaka and Chottogram port, traders are likely to find Mongla a suitable option for export. The first export shipment of readymade garments to any country from Mongla port. Mongla sea port has started reaping the benefits of the Padma Bridge. For the first time, the Panama flagged ship ‘Maerks Nesna’ started its journey from Mongla Port to Poland with the garment products made by various companies coming through the Padma Bridge on July 28. Export of garment products using Mongla port is a milestone for the port.

The region is gradually turning risky with the rise of the sea level. Salinity is increasing, natural disasters also occur more frequently in this region. There are rules for how much agro lands can be used for industrial purposes.  If lands are allocated for industries inside economic zones, it will save agro lands on one hand. On the other hand, investors will also get all sorts of facilities in one place. On the other hand, the Bridge will rekindle the hope of establishing new factories in districts like Khulna. This would facilitate the creation of economic zones in Bangladesh and their subsequent contribution to enhancing trade activities in the sub-region.

With the opening of Padma Bridge for traffic, southern districts await a big jump in investments, spearheaded by the expansion of both production and exports. Besides, the region is now an attractive place for setting up new factories. If Bangladesh can ensure an investment environment in 17 proposed special economic zones in 21 districts, there will be 7.5 lakh new jobs. It has also been noted that over 100 companies already bought land in Barisal BSCIC areas. Districts like Faridpur, Madaripur, Shariatpur, Bagerhat, Gopalganj, and Khulna are considered focal points for investing by industrialists. Around Tk 10,000-20,000 crore is expected to be invested within the next 10 years in areas surrounding Barisal  District. Investors will choose this region for relocating their factories, because the lead time will come down by at least ten hours. So, why would the people continue to buy land at a higher cost in Dhaka or its adjacent areas to build their factories.

Geologically, Bangladesh remains at the centre of this entire region. Along with infrastructural development, if Bangladesh can ensure policy development and bring useful policies to the foreground, it can assume the central role in the overall development of the region. The Padma Bridge will sharply boost regional connectivity and increase intra- and inter-regional trade in the sub-region while reducing the cost and time of cargo movement. Also, it will bring economic development to the sub-region. It will provide an essential link in the transportation infrastructure of Bangladesh, Nepal, Bhutan and India.

Due to Bangladesh’s strategic location, the Padma Bridge promises to contribute to a multi-modal international transport network for the South Asian nations, through strong links along the Asian Highway. Moreover, it serves as the missing link of the Trans Asian Railway and Asian Highway Network, and will become an integral part of BCIM. With the bridge in use, a more integrated Bangladesh will surely contribute to a more integrated and prosperous South Asia and beyond. It will offer a wide range of potentials for national and regional economic growth through promotion of international transports. Significant impacts are expected on international trade between neighboring countries such as India, Nepal, Bhutan, and Myanmar.

The bridge itself is not sufficient to get optimum benefit out of the bridge. The facilities in Mongla Port and Payra Port should be enhanced and the customs system should be making business friendly with harmonizing the tax system and other related issues. If it is done, Bangladesh will enjoy multipronged benefits in trade and connectivity. The issues of improvement of infrastructure, availability of electricity and gas facilities or improvement of the investment environment in the northern region.

With the prospect of export looking brighter in the days ahead, upscaling the cargo handling capacity and facilities of the Mongla port is crucial not only for easing the ever-increasing load on Chottogram port but more importantly for its becoming a major sea port of the country as well as of the region. At present, there are no direct links between two major southern seaports Mongla and Payra. The Padma will bridge that gap. The Padma Bridge has been inaugurated and let us look beyond the Padma Bridge to get highest dividend from the bridge.

The writer is Non-Government Adviser, Bangladesh Competition Commission. He can be contacted at mssiddiqui2035@gmail.com