Like a new circus in town, a new tamasha (spectacle) has arrived to entertain all of us in Bangladesh. It is the curious and sudden cancellation of a $1.2 billion World Bank (WB) loan for construction of a bridge over the river Padma connecting the capital Dhaka with the south west of the country. The media here is abuzz, so also our Parliament. So what is really happening?
Since our Independence in 1971, three Bretton Woods institutions including the WB have given us $16.8 billion in fiduciary support for implementing 251 projects. Even today, 35 projects worth $ 4.9 billion are in various stages of implementation. Yet there is uproar now that the WB has summarily cancelled a loan to construct a bridge.
This bridge would have brought great benefit to 30 million people of this region in terms of employment, trade and investment. The western part of Bangladesh would be linked to the prosperous eastern part of the country by road and rail. It would also have helped to supply gas and electricity to the neglected region.
The project was an election pledge by this Awami League government. Its successful implementation would have boosted the party's credibility and its chances of being reelected in 2014. But the cancellation of the loan by the World Bank quoting "credible evidence, collaborated by a variety of sources, which points to a high level corruption conspiracy among Bangladeshi government officials" has come as a body blow to the Awami League.
However, before cancelling the funding, the WB had given some conditions to the government. They were:
-To form a high powered team to probe allegations of corruption in the bridge project;
-To appoint an independent body to monitor implementation of the project and make recommendations;
-Not to allow those linked to corruption allegations to be a part of the project implementation;
-To allow co-financiers to be actively included in the procurement process for the bridge;
-To increase the capacity of the Bangladesh Anti Corruption Commission (ACC) in the long run;
-To keep the WB informed of the progress of implementation.
The government however had some reservations. It did not:
1. Want to sign a Memorandum of Understanding (MOU) with the World Bank on corruption. It not only seemed disgraceful but also seemed like admission of something which is only alleged;
2. Want to "send on leave officials allegedly involved in corruption." It also did not subscribe to the request of the WB designated panel to be kept informed about the progress of the ACC probe and to take WB advice on the matter.
The government instead informed the WB that it had already set up a separate enquiry cell in the ACC for probing alleged corruption and therefore setting up another panel would be a duplication; also that the WB advice, to give any foreign panel full access to ACC findings, was not in conformity with ACC laws.
But interestingly, the WB, in the meantime, had advised the government, on three separate occasions, to allow a Chinese company called CRCC, which was left out, to be allowed to pre-qualify for the bid. The Evaluation Committee, comprising of eminent experts of the country, could not accept WB recommendation. It discovered that CRCC had no previous experience in building such large bridges. The government also enquired and found that the CRCC had never applied for reconsideration of its case. It was its Bangladeshi agent, Ventura International Ltd., that had insisted on its inclusion. CRCC itself had no interest in building the bridge.
The WB also sent two officers from its Integrity Department to Dhaka to enquire into corruption allegations. They reportedly met a business group and tried to find out more. In the meantime, the prime minister herself made some changes in the Bridge Division that would implement the project. She terminated the services of the project director, transferred the secretary of the Division and allocated a different ministerial portfolio to the then communications minister. So in some ways the government acceded to the request of changes in the implementing agency to stem corruption, if any.
However, all this did not seem to satisfy the WB. So last month it decided to withdraw funding of the Padma project. To many, the WB action seemed like "jumping the gun." The cancellation of the loan was premature as the ACC was yet to complete its investigations about corruption in high places related to this project. But to many others, the WB had done the right thing. By not funding the project it sent out a strong signal that it has "zero tolerance" for corruption.
Through cancellation of the funding, the word also seems to have spread that Bangladesh is not a sound investment destination.
But does Bangladesh deserve this characterisation? In the past, when the now opposition Bangladesh Nationalist Party was in power, the WB had cancelled funding of several projects for alleged corruption in the same communications sector, including the Dhaka-Mymensingh four lane project. But the government ignored the charges and restarted the work with its own funds.
What is curious is that a global institution like the WB had taken such drastic action on the basis of sketchy evidence, which can be challenged in any court of law around the world. Of course, the public is still not privy to all the evidence that the WB may have collected. It is presumed that it must have based its action on more solid evidence. It must now reveal them for the public eye. The people must be able to judge whether it was the right thing for the WB to do. But do not also forget that there have been instances of corruption within the WB. There are past records of its own malfeasance. It could be a case of the kettle calling the pot black.
Bangladesh must not therefore close the file on Padma Bridge project. It will provide the WB with an opportunity and the government also to serve these poor people. Bangladesh must get the WB to reverse its decision. Both sides must sit down and allow good sense and probity to take hold. We would need seasoned diplomats to make this happen. They must work this out. The economists and the technocrats can come in later to give their input. The excellent project must be put back on track. We owe it to our people.
Bangladesh has the option to finance the bridge itself. It can also get alternative funding from friendly countries like Malaysia. But the best option in terms of repayment and costs overrun is still the WB.
Let the tamasha end and the real work begin again.
The writer is a former Ambassador and is a regular commentator on contemporary issues and can be reached at email@example.com
The Daily Star, 8 July 2012