WB formally cancels Padma bridge funding over 'graft'
‘WB cannot, shouldn’t turn a blind eye to graft evidence’
Dhaka, June 30 (UNB) - The World Bank has formally canceled its US$1.2 billion IDA credit in support of the Padma Multipurpose Bridge project, the country’s largest-ever bridge, citing corruption concerns.
“The World Bank can’t, shouldn’t, and won’t turn a blind eye to evidence of corruption. We’ve both an ethical obligation and a fiduciary responsibility to our shareholders and IDA donor countries,” the WB said in a strong note on Saturday.
In light of the inadequate response by the Government of Bangladesh, the WB has decided to cancel its US$1.2 billion International Development Association (IDA) credit in support of the Padma Multipurpose Bridge project, effective immediately, the Washington-based development institution said.
It said the WB has credible evidence corroborated by a variety of sources which points to a high-level corruption conspiracy among Bangladeshi government officials, SNC Lavalin executives and private individuals in connection with the Padma Multipurpose Bridge Project.
The statement also said it is their responsibility to make sure IDA resources are used for their intended purposes and that they only finance a project when they have adequate assurances that they can do so in a clean and transparent way.
In an effort to go the extra mile, the statement said. The WB sent a high-level team to Dhaka to fully explain the Bank’s position and receive the Government’s response. “The response has been unsatisfactory.”
The WB provided evidence from two investigations to the Prime Minister, as well as the Minister of Finance and the Chairman of the Anti -Corruption Commission of Bangladesh (ACC) in September 2011 and April 2012.
“We urged the authorities of Bangladesh to investigate this matter fully and, where justified, prosecute those responsible for corruption. We did so because we hoped the government would give the matter the serious attention it warrants,” the WB said.
In Canada, where SNC Lavalin ‘s headquarters are located, after executing numerous search warrants and a year-long investigation based on a referral from the WB, the Crown Prosecution Services brought corruption charges against two former SNC executives in connection with the Padma Bridge Project.
Investigation and prosecution are going on but the court filings to date underscore the gravity of this case.
“Because we recognise the importance of the bridge for the development of Bangladesh and the region, we nonetheless proposed to proceed with an alternative, turnkey-style implementation approach to the project provided the government took serious actions against the high-level corruption we had unearthed.”
It would be irresponsible of the Bank not to press for action on these threats to good governance and development, the WB said.
To be willing to go forward with the alternative turnkey-style approach, the WB sought the following actions: (i) place all public officials suspected of involvement in the corruption scheme on leave from government employment until the investigation is completed; (ii) appoint a special inquiry team within the ACC to handle the investigation, and (iii) agree to provide full and adequate access to all investigative information to a panel appointed by the WB comprised of internationally recognized experts so that the panel can give guidance to the lenders on the progress, adequacy, and fairness of the investigation.
“We worked extensively with the government and the ACC to ensure that all actions requested were fully aligned with Bangladeshi laws and procedures.”
The WB proposed that when the first bids would be launched, the Bank and the co-financiers would decide to go ahead with project financing if they had determined, based on the Panel’s assessment, that a full and fair investigation was under way and progressing appropriately.
Backgrounds
In April last year, the government signed a deal with the WB for a US$1.2 billion loan to construct the country’s longest US$ 2.9 billion bridge.
The Asian Development Bank was supposed to provide US$615 million, Japan International Cooperation Agency US$400 million and Islamic Development Bank US$140 million more for construction of the multipurpose bridge.
But uncertainty shrouded over the financing of Padma Bridge project when the project was stalled in October last year following corruption allegation in the bidding process by the World Bank.
In December last year, then Communications Minister Syed Abul Hossain visibly fell from grace as he lost his prize post and has been given the newly restructured ICT Ministry amid corruption allegations that led the WB to suspend its loan commitment for the mega roject.
On December 5, in a major reshuffle in the cabinet, the government replaced Syed Abul Hossain with Obaidul Quader as the Communications Minister.
Abul faced bitter criticisms, both inside and outside the parliament, for graft in Padma Bridge project and his failure in repairing and maintaining the roads and highways.
On June 28, Finance Minister AMA Muhith in Parliament said the government would not disclose the names of the people allegedly involved in corruption in the Padma bridge project without any evidence.
He also said the decision on financing the Padma bridge project would be finalised by July.
On June 16, Communications Minister Obadiul Quader said the government would construct the Padma Bridge with its own fund if the WB and other donors express unwillingness to finance the project.
On June 28, Malaysia placed a draft proposal for signing a final deal for the construction of the much-talked-about Padma Bridge.
Malaysian special envoy for South Asia on Infrastructure Dato' Seri S Samy Vellu formally submitted the draft proposal to Communications and Railways Minister Obaidul Quader.
“The World Bank can’t, shouldn’t, and won’t turn a blind eye to evidence of corruption. We’ve both an ethical obligation and a fiduciary responsibility to our shareholders and IDA donor countries,” the WB said in a strong note on Saturday.
In light of the inadequate response by the Government of Bangladesh, the WB has decided to cancel its US$1.2 billion International Development Association (IDA) credit in support of the Padma Multipurpose Bridge project, effective immediately, the Washington-based development institution said.
It said the WB has credible evidence corroborated by a variety of sources which points to a high-level corruption conspiracy among Bangladeshi government officials, SNC Lavalin executives and private individuals in connection with the Padma Multipurpose Bridge Project.
The statement also said it is their responsibility to make sure IDA resources are used for their intended purposes and that they only finance a project when they have adequate assurances that they can do so in a clean and transparent way.
In an effort to go the extra mile, the statement said. The WB sent a high-level team to Dhaka to fully explain the Bank’s position and receive the Government’s response. “The response has been unsatisfactory.”
The WB provided evidence from two investigations to the Prime Minister, as well as the Minister of Finance and the Chairman of the Anti -Corruption Commission of Bangladesh (ACC) in September 2011 and April 2012.
“We urged the authorities of Bangladesh to investigate this matter fully and, where justified, prosecute those responsible for corruption. We did so because we hoped the government would give the matter the serious attention it warrants,” the WB said.
In Canada, where SNC Lavalin ‘s headquarters are located, after executing numerous search warrants and a year-long investigation based on a referral from the WB, the Crown Prosecution Services brought corruption charges against two former SNC executives in connection with the Padma Bridge Project.
Investigation and prosecution are going on but the court filings to date underscore the gravity of this case.
“Because we recognise the importance of the bridge for the development of Bangladesh and the region, we nonetheless proposed to proceed with an alternative, turnkey-style implementation approach to the project provided the government took serious actions against the high-level corruption we had unearthed.”
It would be irresponsible of the Bank not to press for action on these threats to good governance and development, the WB said.
To be willing to go forward with the alternative turnkey-style approach, the WB sought the following actions: (i) place all public officials suspected of involvement in the corruption scheme on leave from government employment until the investigation is completed; (ii) appoint a special inquiry team within the ACC to handle the investigation, and (iii) agree to provide full and adequate access to all investigative information to a panel appointed by the WB comprised of internationally recognized experts so that the panel can give guidance to the lenders on the progress, adequacy, and fairness of the investigation.
“We worked extensively with the government and the ACC to ensure that all actions requested were fully aligned with Bangladeshi laws and procedures.”
The WB proposed that when the first bids would be launched, the Bank and the co-financiers would decide to go ahead with project financing if they had determined, based on the Panel’s assessment, that a full and fair investigation was under way and progressing appropriately.
Backgrounds
In April last year, the government signed a deal with the WB for a US$1.2 billion loan to construct the country’s longest US$ 2.9 billion bridge.
The Asian Development Bank was supposed to provide US$615 million, Japan International Cooperation Agency US$400 million and Islamic Development Bank US$140 million more for construction of the multipurpose bridge.
But uncertainty shrouded over the financing of Padma Bridge project when the project was stalled in October last year following corruption allegation in the bidding process by the World Bank.
In December last year, then Communications Minister Syed Abul Hossain visibly fell from grace as he lost his prize post and has been given the newly restructured ICT Ministry amid corruption allegations that led the WB to suspend its loan commitment for the mega roject.
On December 5, in a major reshuffle in the cabinet, the government replaced Syed Abul Hossain with Obaidul Quader as the Communications Minister.
Abul faced bitter criticisms, both inside and outside the parliament, for graft in Padma Bridge project and his failure in repairing and maintaining the roads and highways.
On June 28, Finance Minister AMA Muhith in Parliament said the government would not disclose the names of the people allegedly involved in corruption in the Padma bridge project without any evidence.
He also said the decision on financing the Padma bridge project would be finalised by July.
On June 16, Communications Minister Obadiul Quader said the government would construct the Padma Bridge with its own fund if the WB and other donors express unwillingness to finance the project.
On June 28, Malaysia placed a draft proposal for signing a final deal for the construction of the much-talked-about Padma Bridge.
Malaysian special envoy for South Asia on Infrastructure Dato' Seri S Samy Vellu formally submitted the draft proposal to Communications and Railways Minister Obaidul Quader.
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