Cancellation of WB fund was a wrong policy : Muhith

Finance Minister AMA Muhith Tuesday said the cancellation of fund by the World Bank for the Padma Bridge project for alleged conspiracy of corruption was a wrong policy of the global lending agency, reports UNB.
"Now they've admitted it was a wrong policy," he told reporters replying to their queries at his ERD office after WB country director Johannes Zutt and high WB official Junaid met him.
The Finance Minister's comment came following the World Bank's recent realigned approach to tackling corruption in projects after the much-talked-about Padma bridge episode.
Previously, the multilateral Washington-based lender would wash its hands off projects as soon as allegations of corruption surfaced.
But now, in essence, it will carry on with the projects but will work with local authorities to identify and snuff out the issues.
"When the evidence of corruption comes to light, its response should not be to disengage, but to engage differently," the WB said in its Country Assistance Strategy Progress Report.
The Finance Minister said the WB is now saying that their tactics was wrong which is good for the WB and also for the developing countries. "This means now they (WB) will be more cautious to have such kind of disengagement."
Replying to a question, he reiterated that there was no corruption in the Padma Bridge project.
Muhith told another questioner that due to disengagement by the WB, the country lost two years for starting the project work as the plan for beginning the work was in 2012. "Now we've started it in
2014, so two years are lost. But, as far as the money is concerned,
there is no loss....,"
About the image problem over the allegation of conspiracy of corruption in the Padma Project, the Finance Minister said it will get solved after the case is completed by the Anti Corruption Commission (ACC).
The WB cancelled its financing for the Padma bridge project in June 2012 after corruption allegations were brought up against some public servants.
Although talks had revived, Bangladesh ultimately withdrew its request for funds in January 2013, just before the expert panel reported that the government did not carry out the full and fair corruption investigation it had promised to.
However, Muhith expressed satisfaction over the foreign aid flow to the country in the last
fiscal year (FY 14) as it hit US$3.0 billion following a significant rise in disbursement by the WB.
"Aid commitment to the country has increased fantastically, but compared to that disbursement is slow to some extent ....Receiving $ 3 billion last year is a good performance although it would have been ideal had it reached $ 3.2 billion. I'm quite happy about it," he told reporters at his ERD office.
Muhith said the country in the last fiscal year (FY 14) saw the highest disbursement of foreign aid in its history.
About the media reports on the pipeline foreign aid reaching over $19 billion, the Finance Minister said the foreign aid in the pipeline hit $ 18 billion on July 1, 2014 which was $ 16 billion on July 1, 2013.
He said the ERD would issue a statement within this week on the latest disbursement of aid by the development partners as well as aid in the pipeline.
According to the ERD, the development partners had pledged $5.85 billion worth of loans and grants in FY 13.
In the last fiscal year (FY 14), the WB disbursed a record-high $950 million, including $140 million of the multi-donor trust fund, and the Chinese government $466 million.
Meanwhile, the aid disbursement by Bangladesh's second-largest bilateral donor-the Asian Development Bank - lowered as the ADB gave $469 million worth of assistance in the last fiscal, lower $283 million than that in the previous FY2013.
Among other development partners, Japan International Cooperation Agency (JICA) disbursed $337.54 million, UN systems $177.60 million, UK's Department for International Development (DFID) $134.53 million, India $115.15 million and the Islamic Development Bank (IDB) $67.43 million in assistance.
Out of the total $3.0 billion aid in the last fiscal, Bangladesh's multilateral and bilateral development partners provided $2.27 billion in loans and $723.60 million in grants.
Meanwhile, the donors confirmed $5.34 billion worth of loans and $499.36 million of grants in the last fiscal for disbursement against different development projects and programmes in Bangladesh, the ERD data showed.
The government has already repaid $1.23 billion funds as principal and interests for the outstanding public-sector debts to the bilateral and multilateral lenders between July 2013 and June 2014.
Among the repayments, the government paid $1.03 billion worth of principal amount for the outstanding debts and $202.47 million as interests.
In the corresponding period in FY2013, the government made $1.11 billion payment to the lenders for the outstanding debts-- $908.20 million as principal and $197.50 million as interests.