Bangladesh declines World Bank loan for Padma Bridge
By Chris Sleight03 February 2013
The government of Bangladesh has withdrawn its request for a World Bank loan for the Padma Bridge project, according to a statement from the multi-lateral lender. Two other financiers, Asian Development Bank (ADB) and Japan International Cooperation Agency (JICA) have also withdrawn funding from the scheme, which would have totalled US$ 1.01 billion.
Local media have reported finance minister Abul Maal Abdul Muhith as saying the government will press ahead with the project using its own resources, but this has been questioned by oposition leaders.
The World Bank agreed a US$ 1.2 billion loan for the US$ 2.9 billion project at the start of 2011. However, by June 2012, allegations of corruption around the scheme forced it to withdraw financing. The Bangladeshi government initially said it would push-ahead with the project itself, and finance it by issuing debt.
But in September last year the World Bank said it would reinstate the loan if the Government launched a full investigation into corruption alleagations and allowed an external panel to scrutinise the process. The panel was appointed in October, and was to be chaired by Luis Moreno Ocampo, a former chief prosecutor of the International Criminal Court (ICC).
A statement from the World Bank said, “The letter to the World Bank confirms the authorities' intent to continue the investigation of alleged corruption related to the project. The World Bank has taken note of the government's decision of not seeking renewed World Bank financing for the Padma Bridge, and it encourages the Anti-Corruption Commission to complete a full and fair investigation of the corruption allegations.”