WB revives $1.2b loan after govt meets conditions
The World Bank has finally decided to revive its $1.2b loan deal for the Padma bridge project as the government has removed the hurdles to end an impasse over the scheme.
In a release on Thursday, the global lender said, “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, it will engage anew in the Padma bridge project.”
The WB also clearly hinted that it would not tolerate any corrupt practices in the nearly $3 billion project. “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.”
For the first time in its 65-year history, the bank has completely withdrawn its cancellation of a loan deal.
There are instances of the bank withdrawing its loan cancellation order partially in some projects, but reviving a loan deal in its entirety is unprecedented, said a WB official.
The reinstatement of the deal will not require any approval from the WB board as the loan was cancelled before its activation. The bank’s president and managing director have decided to revive the agreement, he added.
A finance ministry official said special moves by some high-ranking government officials and a host of countries contributed to the revival of the deal.
The government in April last year had entered the loan deal with the WB for implementing the country’s largest ever infrastructure project.
But the Washington-based bank in September the same year postponed its funding for the project, citing it had proof of a corruption conspiracy involving Bangladeshi officials, executives of a Canadian consultancy firm and some private individuals.
Since then the government and the WB had been engaged in a series of discussions, but the differences between the two sides were not resolved.
On June 29, the WB cancelled the loan deal after the government had failed to meet two of the four conditions set by the bank to release the fund.
The conditions were (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 recognised experts so that they can give guidance to the WB 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.
Even after meeting three conditions, revival of the deal became uncertain due to the government’s indecision over sending prime minister’s Economic Affairs Adviser Mashiur Rahman on leave.
A negotiations team led by prime minister’s International Affairs Adviser Gowher Rizvi went to Washington on Sunday.
Eventually, the government on Wednesday sent a letter to the WB headquarters, confirming that it has fulfilled all the conditions.
“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,” read the WB statement.
“Following our cancellation of the credit, the government of Bangladesh took actions necessary to fulfil the above measures. The government of Bangladesh has now begun to address the evidence of corruption the bank identified.”
In its communication with the WB, mentioned the release, the government requested the bank to consider again the financing of the bridge.
Contacted for Finance Minister AMA Muhith’s reaction, the minister’s public relations officer Shahedur Rahman said Muhith would brief the media once Gowher Rizvi was back home from Washington.
Courtesy of The Daily Star