Reference ID: 10DHAKA120
Created: 2010-02-10 03:41
Released: 2011-08-30 01:44
Classification: CONFIDENTIAL
Origin: Embassy Dhaka
VZCZCXRO0106
RR RUEHBI RUEHCI RUEHDBU RUEHLH RUEHNEH RUEHPW
DE RUEHKA #0120/01 0410341
ZNY CCCCC ZZH
R 100341Z FEB 10
FM AMEMBASSY DHAKA
TO RUEHC/SECSTATE WASHDC 9997
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBK/AMEMBASSY BANGKOK 8640
RUEHBJ/AMEMBASSY BEIJING 0700
RUEHML/AMEMBASSY MANILA 1494
RUEHRO/AMEMBASSY ROME 0513
RUEHKO/AMEMBASSY TOKYO 1205
RHHMUNS/COMSOCPAC HONOLULU HI
RHHJJPI/PACOM IDHS HONOLULU HIC O N F I D E N T I A L SECTION 01 OF 03 DHAKA 000120
SIPDIS
DEPT PLEASE PASS USAID
DEPT FOR SCA/INSB
E.O. 12958: DECL: 02/09/2020
TAGS: EINV EAID ELTN BEXP PREL BG
SUBJECT: THE ROAD TO AWAMI LEAGUE RE-ELECTION: BANGLADESH
MINISTER MAPS TRANSPORT INFRASTRUCTURE
REF: 09 DHAKA 568
Classified By: Ambassador James F. Moriarty, Reasons 1.4 (b) and (d)
SUMMARY
-------
¶1. (C) Bangladesh's Communications Minister, who is
responsible for the nation's bridges, roads and rail, told
the Ambassador February 3 that completing major
infrastructure projects in southwest, southeast and northern
Bangladesh was critical to the Awami League's re-election
chances in four years. Minister Syed Abul Hossain said the
massive Padma Bridge project was ready to move to the bidding
process provided donors could agree on the packaging of the
project's contracts; he requested USG assistance in
persuading Japan to agree to the contract format preferred by
the Government of Bangladesh (GOB), World Bank and Asian
Development Bank (ADB). The Minister also described progress
on road projects in southeastern and northern Bangladesh.
Finally, he requested USG support for an elevated road
project in Dhaka. The Minister, who has a reputation for
less-than-honest business dealings, remains focused on
delivering the infrastructure projects he and Prime Minister
Sheikh Hasina have promised to Bangladesh voters.
PADMA BRIDGE -- ONE STRUCTURE OR TWO?
-------------------------------------
¶2. (C) At a February 3 dinner he hosted, Communications
Minister Syed Abul Hossain expressed satisfaction with the
levels of support donors planned to provide for the Padma
Bridge project, which will for the first time link
southwestern Bangladesh with Dhaka and the more prosperous
eastern region of the country. According to the Minister,
the World Bank pledged $1.5 billion, the ADB $550 million,
the Japanese International Cooperation Agency (JICA) $500
million, and the Islamic Development Bank $130 million,
primarily in soft loans.
¶3. (C) However, the Minister complained that JICA was
insisting on dividing the contract for the bridge itself into
two parts: a contract for the bridge's sub-structure and one
for the super-structure. Under this plan JICA's loan would
fund the sub-structure. The GOB, World Bank, ADB and others
opposed this plan on the grounds that a single over-arching
contract for the bridge itself would limit competing claims
of liability in the event of future problems. The Japanese
proposal to split the bridge into two structures, Hossain
said, would allow two different contractors to lay the blame
for any problems on the other contractor. The Minister asked
the Ambassador to use his good offices with Japan and USG
support for the World Bank and ADB to urge JICA to reconsider
its stance.
DESPITE CHALLENGES INTEREST IN PADMA BRIDGE REMAINS HIGH
--------------------------------------------- -----------
¶4. (C) Hossain and the Ambassador agreed there were many
companies interested in bidding on the Padma Bridge project.
The Minister said he knew of 13 firms who had expressed
interest. The Ambassador added that one U.S. firm had
demonstrated interest in the river dredgeing portion of the
project and that there were sure to be more U.S. companies
stepping forward as the bidding process progressed. The
Minister outlined an ambitious timeline, a call for
pre-qualification submissions by the end of February, winning
bidders and contracts finalized before the end of 2010 and a
target completion date of 2013.
DHAKA-CHITTAGONG AND DHAKA-MYMENSINGH ROADS
-------------------------------------------
¶5. (C) The other two linchpins in the Minister's
infrastructure-for-elections plan are expanding roads from
Dhaka southeast to Chittagong, Bangladesh's second largest
city, and north to the district of Mymensingh. The Minister
said he had already awarded the contracts for $200 million
project to expand the road that links the capital to
Bangladesh's main port city, Chittagong. Of the ten
DHAKA 00000120 002 OF 003
contracts that make up the Dhaka-Chittagong road expansion
project, foreign, mainly Chinese, firms won seven bids, and
local companies won three bids.
¶6. (C) Part of the Minister's plans for northern road
expansion include a 32-km, $2 billion elevated expressway to
be built through a public-private partnership project. The
Minister told the Ambassador that a Korean firm and a
Thai-Italian consortium presented solid proposals during
recent pre-bid discussions.
ELEVATED ROAD AND RAIL WITHIN DHAKA
-----------------------------------
¶7. (C) The Minister also urged the USG to support a Dhaka
infrastructure project that would be tangible proof of the
strong U.S.-Bangladesh relationship. "We need a visible
USAID project in the metropolitan area," Minister Hossain
said. He proposed the USG fund a 3-km, $34 million project
to build an elevated road and rail crossing that would
connect northwestern Dhaka with Zia International Airport in
the northeast across Dhaka's military cantonment, which
bisects northern Dhaka.
¶8. (C) The Ambassador noted that the USG had largely gotten
out of the business of funding large infrastructure projects.
He described other examples of U.S. support for
infrastructure in Bangladesh, including in the power sector
and, most recently, in our commitment to build scores of
cyclone shelters/schools around southern Bangladesh.
REFORMING BANGLADESH RAILWAYS
-----------------------------
¶9. (C) The Communications Minister described several
initiatives to modernize Bangladesh's decrepit railways. In
addition to expanding the Dhaka-Chittagong highway, the
Minister said construction to broaden the single rail line
between the two cities to a double rail line would begin
within a couple of months. The Minister said the Prime
Minister had also tasked him to develop an elevated rail
system in Dhaka to alleviate the city's traffic crisis.
According to the Minister, JICA had expressed interest in
loaning funds for the $3 billion project; alternatively, the
elevated rail system could be a public-private partnership
project. Finally, the Minister described plans to transform
Bangladesh Rail into an independent, though government-owned,
entity from its current structure as a government-run
enterprise. The Minister was confident that these plans to
"corporatize" and then perhaps privatize Bangladesh Rail
would greatly improve the firm's efficiency and quality of
service.
COMMENT
-------
¶10. (C) According to contacts in the Dhaka-based donor
community, Japan is pushing hard to divide the Padma Bridge
project into a contract each for the sub-structure and
super-structure. The Japanese have lobbied at World Bank
headquarters in Washington and at ADB in Manila, in addition
to the GOB in Dhaka. Donors speculate the Japanese
government supports the two-contract format so it could
encourage Japanese firms to bid on the sub-structure contract
JICA would fund.
¶11. (C) Allegations of corruption continue to surround the
Communications Minister (reftel). Other high-ranking GOB
officials have acknowledged to us problems with the
Minister's way of doing business. The Minister is also
reputed to have close ties to China. (NOTE: The Prime
Minister is scheduled to visit China in April. END NOTE.)
That said, the Minister is clearly determined to fulfill his
mission to develop infrastructure with a view to improving
connectivity and securing votes for the Awami League. The
numerous projects described by the Minister all represent
opportunities for U.S. business. Mission Dhaka will work to
publicize these opportunities and work with interested U.S.
firms to secure contracts in a legal and transparent manner.
DHAKA 00000120 003 OF 003
MORIARTYSource: WikiLeaks Cable
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