Padma bridge co-financiers ADB, Jica extend loan deal by a month; wait to see how govt acts on WB’s graft concern; failure to cost future donor funding
The ADB and Jica have extended their Padma bridge loan effectuation date by a month with a clear message that during this time the government has to address the issues of corruption raised by the World Bank.
If the government does not does not do so, the Asian Development Bank (ADB) and Japan International Cooperation Agency (Jica) will not fund the bridge project.
In such a case, their future financing of Bangladeshi projects, might also become uncertain, officials told The Daily Star following talks between ADB-Jica and Economic Relations Division (ERD) yesterday.
And conversely, if the government addresses the corruption issues, the two donors might agree to fund the bridge project along with some other donors even if the WB does not finance it, said the officials.
The ADB and Jica representatives said they expected proper investigation into the corruption allegations, the officials mentioned.
ADB Country Director in Bangladesh M Teresa Kho and Jica Chief Representative Toda Takao yesterday met ERD Secretary Iqbal Mahmud at his office and handed over a letter conveying the two donors’ decision to extend the loan effectuation deadline.
The two donor representatives told the ERD chief that during the next one month, they would closely observe what steps the government was taking to address the Padma bridge funding crisis.
Officials of the ADB, Jica and ERD declined to say anything to the press after the meeting.
Later in the evening, Finance Minister AMA Muhith told journalists at his secretariat office that the loan effectuation date was extended by one month.
“I am happy at the deadline extension,” he said, adding that the government was yet to send any formal letter to the WB requesting review of its decision cancelling the financing commitment. Muhith declined to say whether any letter would be sent.
Yesterday was the last date for loan effectuation by the ADB and Jica. Last week Earlier, the finance ministry had requested them to extend the date.
A finance ministry official said yesterday both the ADB and Jica also conveyed their concern relating to governance issues.
Meanwhile, the extension of loan effectuation deadline followed some recent developments including the resignation of a minister allegedly involved in corruption in the bridge project.
Earlier, the ADB and Jica had extended the loan effectuation deadline thrice since the WB temporarily suspended its funding in August last year.
The global lender on June 29 finally cancelled its $1.2 billion funding of the $2.9 billion project due to the government’s reluctance to meet two of its four conditions.
Following this, the ADB in a statement said it understands and respects the reasons that had led the Washington-based lender to take the decision.
The government last week said the Anti-Corruption Commission would investigate the WB’s corruption allegations in line with the bank’s proposals.
Abul Hossain, former communications minister, stood down as ICT minister, paving the way for fresh negotiations with the WB.
The government has not yet issued gazette notification on Abul’s resignation.
Although Abul resigned and a former secretary was sent on leave for their alleged involvement in corruption in the bridge project, the government has yet to decide on another person who also is on the WB’s suspect list. The person concerned enjoys the status of a minister, a finance ministry official mentioned.
Courtesy of The Daily Star
