Friday, 1 July, 2022

Padma Bridge to transform Bangladesh’s economy

The opening of Padma Bridge on June 25 is going to be a major transition for the nation as the mega infrastructure is going to open up new possibilities for the national economy. 

The 6.15km mega infrastructure will bridge the two sides of the mighty Padma River, which has kept the country’s over one-fourth population apart from the capital Dhaka in all these years. The mega bridge is expected to have a deep impact on the lives and livelihoods of the people of 21 south and southwestern districts.

Once in operation, economists predict, the bridge will help increase the country’s GDP by 1.23 percent while that of south and southwestern districts by over 2 percent by creating employment opportunities for some 10 million people.

“Definitely the bridge will have a big impact on the economy. The 1.2 percent growth in national GDP or 2.3 percent growth in regional GDP—all are estimates. The growth can be even more,” said Prof Mustafizur Rahman, Distinguished Fellow of the Centre for Policy Dialogue (CPD).

Economic zones will be created, more employment will be generated while eco-parks, industrial parks, tourism and other service sectors will grow after the bridge is open, he explained.

It will transform the lives of nearly 30 million people living in the region, promoting industrial and commercial activities and increasing economic and employment opportunities, according to various studies.

At least 30 million people, one-fifth of the country’s total population, will directly benefit from the bridge, according to a study carried out by the World Bank.

In a study, the Asian Development Bank (ADB) said that the construction of the Padma Bridge would significantly help improve various sectors of the economy nationally and regionally.

Padma Bridge will build an indispensable connection within the framework of Bangladesh. The bridge will erect part of the A-1 line of the Asian Highway and open up southwestern Bangladesh for adventure and development.

The bridge can lead to not only an important highway but also arrange a railway line, which is essential for connecting India's freight transport.

 The Padma Rail Link project is expected to transform Bangladesh into a sub-route of the Trans-Asian Railway Network and contribute about 1 percent to the country’s GDP growth.

Prof Mustafizur, however, thinks only transport and toll collection won’t pay off. In parallel, investments, especially from the private sector will have to be spurred alongside ensuring one-stop services to improve investment climate, he suggested.

At the same time, Bangladesh can benefit from the implementation of the Bangladesh, Bhutan, India and Nepal (BBIN) Motor Vehicles Agreement (MVA) as the bridge will directly connect Mongla and Payra ports, according to him. 

He also emphasizes the timely opening of the rail line to get the full benefit of the multi-purpose bridge.

With the bridge, capital inflow will increase, promoting industrial and commercial activity and increasing economic and employment opportunities for the local population, ADB has said.

According to Zahid Hossain, former lead economist at the World Bank, with the opening of road and rail traffic to the Padma Bridge, people in the country’s southwest region will begin to benefit from the bridge immediately.

By road, the distance between Dhaka and most of the south-western districts will be reduced to at least 100 km. In addition to reducing the time and cost of transporting passengers and goods, vehicle maintenance and fuel costs will be much lower.

As a result, people from all sectors, including business and agriculture, will benefit, impacting the country’s GDP.

The accessibility study conducted by the Japan International Cooperation Agency (JICA) predicts that after the completion of the Padma Bridge, the daily traffic volume will reach 21,300 vehicles and 41,600 vehicles per day by 2025. It said the bridge will save approximately 681,600 litres of fuel per day.

On the other hand, ADB has estimated that the Padma Bridge will carry an average of 24,000 vehicles per day in 2024 and 67,000 by 2050.

In addition, the Padma Bridge will reduce the distance from Mongla Port to Dhaka by more than 100 km to only 170 km, whereas the current distance between Chittagong Port and Dhaka is about 264 km.

According to ADB, the long-term (31 years) road user benefit of the Padma Bridge in the traffic model will stand at $18.512 billion, while Social Accounting Matrix (SAM) has estimated the total project benefit at nearly $25 billion in the period.

Trading across the country is likely to be further boosted after the opening of the Padma Bridge. Experts estimate an industrial revolution in 21 districts in the southwest, especially within a year of the double-decker bridge’s launch.

Bangladesh could become an important corridor in international trading as the Dhaka-Kolkata distance will be reduced by half, cutting the travel time significantly.

 “The 1.2 percent GDP growth contribution of Padma Bridge was a forecast only, which was done much earlier than I took the charge. So, I can’t explain how it was done. I only focused on the bridge construction,” commented Padma Bridge Project Director Shafiqul Islam when asked about the issue.

Experts also believe that many small and big industries will be growing in the south-western part of the country along the Padma Bridge route, including manufacturing businesses, RMG, assembling plants and storage facilities.

According to ADB estimates, the direct investment made around this bridge will boost the regional economy.

JICA estimated that a 10 percent reduction in travel time from Dhaka would increase the district economy to 5.5 percent, which would increase the region’s annual GDP growth by 1.7 percent.

The bridge will be an important hub for many major sectors in the country’s southwest, including multinational communications, trade, tourism, and industry.

Meanwhile, economic activity in the southwest has already increased around the bridge, with mass-level industrialization underway.

Land near highways is now selling at three times higher than the earlier prices than before. There is also an expectation for the rapid growth of mega factories, hospitals, universities, housing industries, and small businesses around the Padma Bridge.

Besides, the ship-breaking industry, RMG, assembling plant, and storage facilities will be set up in the southern part. 

BSCIC sources said 500 to 1000 factories of the different sectors will be set up in six districts of Barisal division in the next 10 years.

If demand for gas, electricity, internet, and infrastructure in the southwest can be met, trade between India, Nepal, and Bhutan with Bangladesh through the region will increase. As a result, the economic landscape of the southwest region will change.