An irritated govt withdraws request to review loan cancellation
The government has finally decided not to take the World Bank’s loan for financing the Padma Bridge project as it has withdrawn its request to the donor agency to
review the cancellation of a $1.2 billion credit, officials said.
In a significant development, the government sent a letter to the WB headquarters in Washington on Thursday withdrawing its request for the loan that was cancelled by
the WB on June 29, 2012 on allegation of corruption conspiracy in appointment of a consultant for the project.
A deadline earlier set by the government to know about the WB’s decision on the loan for the mega project expired on January 31.
The government, however, informed the WB that the ongoing investigation by the Anti-Corruption Commission into the alleged graft in the bridge project would continue.
The WB cancelled the loan but agreed to revive it on certain conditions following a request from the government on September 22, 2012.
But the bank had been dragging its feet on a final decision on whether to fund the bridge, forcing the government to withdraw its request.
Finance minister Abul Maal Abdul Muhith said that the government had decided to go ahead with the bridge project without WB funding to ‘uphold an election pledge.’
Muhith said in a statement on Friday that the project would become uncertain if the government waited further over starting the construction as per schedule of the WB.
The WB in a statement on Friday acknowledged the latest government decision.
‘The government of Bangladesh yesterday (Thursday) informed the World Bank that it is withdrawing its request for World Bank financing for the Padma Bridge,’ said the
statement.
A WB official in Dhaka said the two-page letter by the government attributed its decision to the delay by the WB in taking a decision on the suspended loan.
The letter also explained that the delay was contrary to a government election pledge for starting construction of the bridge within the tenure of the present
government, said the official.
A senior economic relations division official said the observation by WB president Jim Yong Kim on the Padma Bridge in his speech at the Centre for Strategic and
International Studies in Washington on its stance on corruption in the bank-funded projects prompted the government to send the letter to the bank.
The ERD official said the high-ups of the government became certain that a positive response from WB was highly unlikely after Kim stated that they could not consider
financing the Padma Bridge construction until being assured of a complete and fair investigation into the reported graft.
The official pointed out that the WB resorted to buying time by setting one condition after another in the name of probe into the alleged corruption being carried out
by the Anti-Corruption Commission.
A credible probe by the ACC to be supervised by an independent external panel was one major WB condition to review the sanction of the loan.
The external panel visited the capital twice last year to review the ACC investigation. But it was yet to give its recommendations on which the
WB would take a final decision.
The government apparently being irritated by the WB attitude asked the bank to let it know about its decision by January after the ACC filed cases against nine
government officials, including former bridge division secretary Mosharraf Hossain Bhuiyan.
Besides, the government dropped Syed Abul Hossain from the cabinet and sent economic affairs adviser Mashiur Rahman on leave in line with the conditions by the WB.
Experts, however, said the government had taken the decision ‘hurriedly.’
‘The decision would make the project uncertain,’ said former caretaker government adviser Mirza Azizul Islam.
The finance minister in his statement said that the government would slash the project cost and build a road bridge only if it was necessary.
He said the government had conveyed its decision to the WB and other co-financiers. The co-financiers have been requested to stay with the project, he said.
Communications minister Obaidul Quader on Friday said Malaysia, China and India were interested in constructing the bridge and the findings would be confirmed by this
month.
He said the government was also considering construction of the bridge with its own funding as he was talking to reporters while visiting the Dhaka-Mymensingh four-
lane road project in Gazipur.
Prime minister Sheikh Hasina told a party meeting last week that an alternative design of the project by the Bangladesh University of Engineering and Technology would
take six months to complete.
She told her party activists that the government would go ahead with the alternative plan if the WB failed to response by January.
The agreement with the WB on a $1.2 loan was signed on April 28, 2011.
The government also inked separate deals with the Asian Development Bank for a $610 million loan, Japan International Cooperation Agency for $400 million and Islamic
Development Bank for $140 million.
-With New Age input