There is no scope for the World Bank to divert the $1.2 billion Padma Bridge credit line to other development projects in Bangladesh, a WB official told New Age on Wednesday.
But the government is still lobbying the multilateral lender to switch the $1.2 billion funds to other development initiatives, said Economic Relations Division officials.
‘We are keeping on discussing with the World Bank how we can utilise the $1.2b funds originally allocated for the Padma Bridge project for implementing other development programmes in Bangladesh,’ ERD secretary M Abul Kalam Azad told New Age on Tuesday.
But World Bank Dhaka office chief economist Zahid Hossain told New Age on Wednesday, ‘It is not possible for Bangladesh to get back the $1.2 billion funds originally allocated for the Padma Bridge project under the IDA [International Development Association]-15 replenishment of the World Bank.’
The funding commitment for the Padma Bridge was cancelled following a corruption allegation against the then communications minister Abul Hossain and a number of senior government officials.
The government then requested the bank to divert the funds to other development projects.
Zahid said the tenure of IDA-15 replenishment for Bangladesh expired in 2012. ‘So, the proposed funds went back to the IDA, following the cancellation of the funding commitment for the Padma Bridge project.’
‘Therefore, it is not possible for the World Bank to get involved in other development projects with the same funds earmarked for the Padma Bridge project,’ Zahid said.
‘If the World Bank agrees to divert the $1.2b funds to other projects, the development partner needs to make fresh commitments under the current IDA-16 replenishment for different projects in Bangladesh,’ he explained.
The tenure of the IDA-16 replenishment will end in 2015. Under this replenishment, the WB has already committed to provide around $2.5 billion to different development programmes in Bangladesh in 2013 to 2015 in line with its single country assistance allocation strategy.
Therefore, diverting the cancelled credit line of $1.2 billion to other development initiatives means nothing but providing Bangladesh with another $1.2 billion fund from the $2.5 billion funding commitments made under the IDA-16 replenishment as well as cancellation of some development projects due to such diversion, he explained further.
-With New Age input
