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Bridge project: Bangladesh govt may accept World Bank condition

Publication Date : 23-07-2012


The government of Bangladesh may consider accepting the World Bank's fourth condition to persuade the global lender to review its cancellation of loan for the Padma bridge, the country's biggest ever infrastrucure project.

The bank's fourth condition was that the government send on leave public officials and ex-communications minister Syed Abul Hossain, who were allegedly involved in corruption in the project.

The WB cancelled its US$1.2 billion credit for the Padma bridge project on June 29, saying it had proof of a corruption conspiracy involving Bangladeshi officials, executives of a Canadian firm and private individuals.

Talking to reporters at the finance ministry yesterday, Finance Minister A.M.A. Muhith said that the June talks between the government and the WB ended in a stalemate simply because of the bank's fourth condition.

“Though Ellen Goldstein [the WB country director] had spoken of two unresolved issues, there was actually one issue, not two,” the minister said, implying that the issue involving the Anti-Corruption Commission was not really a problem.

“There was a little problem with the World Bank's fourth condition. We are trying to see how it can be resolved.”

He indicated that the government was working to send those public officials on leave.

If the issue of the fourth condition can be solved, the project's work can start very soon, said Muhith.

Talking to reporters yesterday after he received a cheque from Bangladesh Development Bank Ltd in payment of dividend to the government, the finance minister yesterday pointed out that the government had been considering several options for the project. And the first option was to restore the WB-led financing arrangement.

The finance minister said he had mentioned many times that there was no problem in having an international panel to oversee the ACC's probe into the corruption allegations in the project. The commission was prepared for that.

Goldstein in an e-mail interview with The Daily Star published on July 14 responded to the question of whether the government's refusal to remove the minister in charge from the cabinet was the biggest reason for the bank to cancel its financing.

She said the WB had suggested that the government adopt four measures. But the government was unable to commit to two of them.

The two measures that the government refused to take were to appoint an international panel to oversee the ACC probe into the WB's graft allegations in the project, and to send on leave the officials and the minister in charge during the investigation.

Preferring anonymity, a finance ministry official said the WB had advised sending five public officials and former communications minister Abul Hossain on leave.

During talks with the WB in June, the government did not agree to send the minister on leave, said the official.

Muhith at a high-level meeting last week indicated that the government was ready to send all five public officials and the minister on leave in order to reach a compromise with the WB. And the government had already communicated it to the project's co-financiers, the official said.

Abul Hossain in an advertisement in several newspapers recently said he was ready to take any step since some respectable persons thought his presence in the cabinet might hinder the probe into the WB's corruption allegations in the project.

Muhith said yesterday the government had three other options for implementing the project if the WB finally did not change its decision.

One option is that the government will request the other financiers to stay in the project. In that case, it will be necessary to sign new contracts.

“We hope they will stay with us.”

He, however, said the government would have to find new financiers to provide it with the foreign currency the WB had earlier committed.

Another option is to implement the project on the basis of a Public Private Partnership initiative as proposed by Malaysia, said Muhith.

And the other option is to construct the bridge with the government's own resources, said the finance minister.


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