World Bank Cancels $1.2b IDA Credit for Padma Bridge

Michelle Remo, “Big 4″ observer
September 23, 2012 /

The World Bank has canceled a $1.2 billion IDA credit for the Padma Multipurpose Bridge Project.

The Bank’s investigative unit previously shared with the Government of Bangladesh credible evidence of corruption related to our financing of the bridge, and the Bank had identified a series of clear measures to be implemented by the Government for the Bank to remain engaged with the project, which the Government of Bangladesh had failed to meet.

These included: (i) placing all public officials suspected of involvement in the corruption scheme on leave from Government employment until the investigation is completed; (ii) appointing a special inquiry and prosecution team within the Bangladeshi Anti-Corruption Commission to handle the investigation; (iii) agreeing to provide full access to all investigative information to an external panel of internationally recognized experts so that they can give guidance to the Bank and co-financiers on the progress, adequacy, and fairness of the investigation, and; iv) agreeing on new implementation arrangements that gives the Bank and co-financiers greater oversight of project procurement processes.

Following our cancellation of the credit, the Government of Bangladesh took actions necessary to fulfill the above measures. The Government of Bangladesh has now begun to address the evidence of corruption the Bank identified. The World Bank understands that all government employees and officials alleged to have been involved in corrupt acts in connection with the project have been put on leave from Government service until an investigation is completed, and that a full and fair investigation is now underway.

In its communication with the World Bank about the fulfillment of these measures, the Government of Bangladesh requested the World Bank to consider again the financing of the Padma Multipurpose Bridge. The Government agreed to a series of measures as a pre-requisite for any renewed implementation.

These include new procurement arrangements with enhanced oversight, to ensure transparency and clean construction of the bridge; investigations proceeding in a full, fair, and expeditious manner; and an independent External Panel to review the Government’s investigation and report their findings to the Government and the World Bank.

The Bank has agreed that, upon satisfactory implementation of the agreed measures by the Government, and with the support of the Bank’s governing bodies, the Bank will engage anew in the Padma Multipurpose Bridge.

The World Bank remains vigilant to any signs of corruption in the Padma Bridge project, and our determination to take a strong line against wrongdoing will never waver. If implemented properly, the Padma Bridge has the potential to deliver remarkable benefits to the people of Bangladesh, who deserve transparent use of public money, clean implementation of the project and a high-quality bridge to spur growth and development for years to come.

 

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