Govt diverts funds to post-flood rehab projects on WB advice

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Shakhawat Hossain
The caretaker government has diverted funds worth US$ 65 million (6.5 crore) to three post-flood rehabilitation-related projects from the running development programmes following suggestions by the World Bank in this connection, sources said.
The government has to follow the suggestions as a pre-condition for availing the loan worth $75 million that the Washington-based multilateral donor agency has already released as the supplementary budgetary assistance.
Fund diversion was a pre-condition for getting the loan which was essential for the present caretaker administration to maintain the fiscal discipline, according to the sources.
The Planning Commission (PC), at the instruction of Finance Adviser Mirza Azizul Islam, has already informed different ministries and divisions of the developments and has asked them to correct the related development project proformas.
The PC has identified 10 WB-aided projects and has pulled aside a total of $130 million (13 crore) from those projects.
The PC has decided to divert a half of the amount, pulled aside from those development projects due to their slow progress, to three post-flood rehabilitation projects.
Municipal Services and Rural Transport Improvement will be given $20 million each and the Social Investment Programme will get $25 million as per fund diversion decisions.
It has, however, been decided to reallocate the remaining amount to four other projects, namely BD Water Supply Progrmme, Local Government Support, Post-Literacy and Continuing Education, and Water Management Improvement Programme.
The WB is also moving ahead with a plan to extend another $75 million in budgetary support early next year to enhance the government's ability to avoid any macro-economic risks in the aftermath of the cyclone Sidr.
WB vice-president Praful C Patel, who oversees the bank's South Asian operations, is expected to arrive in the capital this month to have meetings with the government officials on the proposed lending.
The global development lender will funnel the aid money through its emergency disaster response fund, created after the 2004 Indian Ocean Tsunami, making it available to Bangladesh by January next year.