Delay in Padma Bridge financing

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The World Bank has suspended its $1.2 billion credit to Bangladesh for the Padma Bridge Project due to alleged irregularities in the appointment of a consultant from Canada. They have officially lodged complaints with both the governments of Bangladesh and Canada about irregularities in the bidding process of the bridge project. It is alleged that SNC-Lavalin Group of Canada might have bribed the top people in the Ministry of Communications for getting selected in the bidding process. World Bank complaint contains allegations against the minister for communications. Royal Canadian Mounted Police (RCMP) have started investigation into the matter on the basis of a reference made by World Bank officials. The World Bank wants the Government of Bangladesh to probe alleged irregularities made in the appointment of the consultant for the Padma Bridge project. They have suspended the credit line to Bangladesh until the government resolves the issue of alleged irregularities. WB will not proceed on disbursement of fund until they are fully satisfied on the fraud and corruption issues. They will not produce the documents relating to corruption without investigation. The Bangladesh government has decided to investigate the allegations. The Anti-Corruption Commission (ACC) has initiated the investigation and the process would be finished within a time limit. An investigation officer has been appointed to follow the charges of corruption. The Chairman of the ACC said that the government would not interfere in the work of the Commission. The government is yet to finalise the modality and terms of reference for the proposed investigation. The finance minister said that even if the government decided to investigate the allegations of irregularities, it could not wait until the probe was completed. He also said that many quarters raised corruption allegations, but in most cases they turned out to have been baseless. The finance minister has now brushed aside the WB's allegation of corruption in the bidding process even before any investigation. He is yet to address his promised press conference. Bangladesh has requested the World Bank to clarify the nature of graft so that those involved in corruption could be punished. They have requested the WB to pin point the nature of corruption and to identify who committed the corruption or connived with those involved in corruption. A thorough investigation would be conducted to root out corruption and punish the people involved once the specific corruption charges were available from the World Bank. Officials of the Prime Minister's Office said that the authorities were determined to remove all corrupt elements at every level of the Padma Bridge project to restore confidence among the development partners. Secretary of the Bridges Division (who is now relieved of his duties) said that they would cooperate with all regarding investigation on the corruption charges. It seems the government would not make any change at the top level of the communications ministry merely on the perceived allegation of corruption. Such action is politically sensitive for the government. Millions of people of the country's south and south-western regions are eagerly waiting for construction of the bridge that will inject new life to the economy as well as connect the Mongla Port with the capital Dhaka. Different stakeholders are critical of the government as it failed to start construction of the Padma Bridge on time. The future of the Padma Multipurpose Bridge looks uncertain following corruption allegations raised from different quarters including the World Bank. All tenders regarding Padma Bridge have been suspended. This is a major setback. Although the present government committed that construction of the Padma Bridge would be completed during its tenure, it failed to start the construction work though about three years have already passed. The communications minister is now saying that the construction work would start within the tenure of the present government. This reflects the probable delay in getting clearance from the World Bank. The parliamentary standing committee has criticised the World Bank for damaging the image of the country. They are saying that some political parties and intellectuals are creating obstacles to the construction of Padma Bridge. This kind of observation will not be helpful in any matter since the World Bank is not under the purview of the parliamentary committee. There are suggestions that the project may be undertaken with the country's own resources. This is an unrealistic proposition. The project is not funded by the World Bank alone, contribution of the Asian Development Bank (ADB), Japan International Co-operation Agency (JICA), and the Islamic Development Bank (IDB) have to be taken into account which make a total of US $2.9 billion. It may not be possible to mobilise this big amount of money for the Padma Bridge project as the government has other priorities. Moreover, Bangladesh does not have the expertise to embark upon such a gigantic project. We have to be patient with the World Bank and allow them to complete the investigation expeditiously. The fallout of the episode is that the World Bank has tagged the availability of $1.2 billion support to the Padma Bridge corruption issue. The government has been trying to secure $1.0 billion from ECF (under extended credit facility). IMF may also hold back fund for the project under some pretext. Bangladesh desperately needs early disbursement of both budgetary support and the ECF credit. The government has been borrowing heavily from the banking system thus fuelling inflationary pressure. The government is also not comfortable with its balance of payment situation because of soaring fuel import bill. Finally, there will be a substantial cost escalation with the resumption of work in the project. The writer is an economist and columnist. He can be reached at email: syedjamaluddin22@yahoo.com