JICA, ADB follow World Bank suit

FE Report The Japan International Cooperation Agency (JICA) Saturday scrapped its committed US$400 million loan for the Bangladesh's multi-billion-dollar Padma Bridge project, according to a statement issued by the lender. After the government requested the World Bank to withdraw financing for the Padma Bridge, the Manila-based lender ADB also cancelled its committed $615 million credits for the scheme on Friday last. After the JICA's withdrawal from the project as co-financier, the government's option for building the US$2.9 billion Padma Bridge with concessional loans is now a distant possibility although the Islamic Development Bank (IDB) is yet to cancel its loan. The four lenders, World Bank, ADB, JICA and IDB jointly made commitment of providing US$2.36 billion soft loan which would meet 81 percent of the total project cost of the Padma Bridge, in October 2010. In a statement ADB said: "A discontinuation of funding by the World Bank means ADB is also unable to proceed with the transaction." JICA's Bangladesh office in its statement, received by the FE through an email Saturday, said: "As a co-financier, we (JICA) are unable to continue our commitment under the current framework." "It is regrettable that they could not find the way to go forward under the current financial framework and our effort did not help overcome the difficult situations, although we have been intensively consulting with the Bangladesh government and the other co-financiers after WB cancelled the loan last June", it said. JICA, a Japan-government's external lending agency, had played a vital role to narrow down the differences between the Bangladesh government and the WB on the Padma Bridge funding over alleged corruption in the project's bidding process. The JICA in its statement said the Government of Bangladesh (GoB) informed JICA of their decision of withdrawal of the request for funding of the Padma Bridge project by the WB. "Our policy is to require the highest standard of ethics. Acknowledging the progress of the investigation on the conspiracy of corruption of the project, we support GoB's firm commitment to anti-corruption, and wish ACC to continue a full and fair investigation into the alleged corruption," the JICA Dhaka office said. JICA has, however, pledged continuation of assisting Bangladesh in its development and good governance and to deliver the result to the people through financial and technical cooperation. Earlier on Friday, the ADB said: "The World Bank is the main financier of the project and ADB a co-financier, alongside JICA and IDB. Given this co-financing arrangement, a discontinuation of funding by the World Bank means ADB is also unable to proceed with the transaction." Acknowledging the importance of the Padma Bridge, the Manila-based lender said it remains hopeful that such an important project will be built. The ADB, however, laid emphasis on the highest integrity, governance, and anti corruption standards saying it is hopeful that Anti-Corruption Commission in Bangladesh will continue a full and fair investigation, and the Government of Bangladesh to continue its work on governance reforms. The ADB has also expressed its pledges to the continued support to the development works in Bangladesh. Bdnews24.com adds: Finance Minister AMA Muhith had hoped that ADB along with IDB and JICA will continue to "support us as they have been all along". "We have requested the ADB, IDB and JICA to stay with us. I am confident they will continue to support us on this project."