World Bank reconsiders Padma funding

By Helen Wright21 September 2012

World Bank

World Bank

The World Bank is looking at re-instating a US$ 1.2 billion loan to support a bridge construction project in Bangladesh, after the country's authorities took action over corruption claims.

In June, the World Bank cancelled its loan for the Padma bridge project, which will cost a total of US$ 2.9 billion to build, after its investigative unit uncovered evidence of corruption from within Bangladesh related to its planned loan.

But the World Bank has now claimed that the Government of Bangladesh has begun to address the evidence of corruption it identified.

"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," it said.

"The Government of Bangladesh requested the World Bank to consider again the financing of the Padma Multipurpose Bridge," the World Bank said, adding that Bangladesh had agreed to a series of measures as a pre-requisite for any renewed implementation,v including a new procurement arrangement with enhanced oversight.

An independent external panel will also be appointed to review the Bangladeshi Government's own investigation. The World Bank said it would engage with the project again if these measures were implemented.

When the World Bank first withdrew funding eearlier this year, Bangladeshi Prime Minister Sheikh Hasina reacted by insisting the country would construct the bridge using its own finances. However, questions were raised as to whether Bangladesh had the resources to go ahead with this.

The World Bank withdrew funds after it received what it described as "credible evidence corroborated by a variety of sources which points to a high-level corruption conspiracy."

It said the conspiracy involved high-level Bangladeshi government officials as well as executives of Canadian construction company SNC Lavalin, which had bid to be the government's representative engineer on the project. Two former SNC-Lavalin executives are currently on trial in Canada on charges of bribing foreign government officials.

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