WB to sign revised deals on 24 projects worth $2.5 billion
Wednesday, 2 December 2009
FHM Humayan Kabir
The World Bank will revise financial agreements on 24 of its funded projects in Bangladesh after the government amended procurement laws ignoring the lender's objections, officials said.
The decision by the country's biggest anti-poverty donor would involve development works and services worth US$2.50 billion including some key infrastructure and humanitarian projects.
Officials of the bank's Bangladesh office said recent changes in the public procurement acts and related rules by the government prompted it to decide signing "revised contract paper" for the projects
"We will send revised contract paper for each of the 24 projects to the government's Economic Relations Division for signing soon," a WB official said, speaking on condition of anonymity.
Bank officials said the projects include $350 million Siddhirganj peaking power plant, $109 million emergency cyclone recovery and restoration work, $210 million rural transport improvement project and $149 million Dhaka supply and sanitation work.
In addition, the bank is also seeking revised deals on $300 million health, nutrition and population sector programme, $250 million enterprise growth and modernisation project, $150 million second primary education development programme and $102 million water management improvement project.
Officials said the revisions would affect local purchases within the projects, since the government's amendments to the Public Procurement Act (PPA) and Public Procurement Rules are mainly related to works and goods procured from Bangladeshi sources.
ERD secretary M Musharraf Hossain Bhuiyan said the World Bank has informed him about the move but he would not comment unless he sees details of the proposed deals.
"Let me first know about the World Bank's revised proposals. We'll take further steps after consulting with other government agencies which are implementing the projects," he told the FE.
Experts and officials have said the Washington-based lender's tough stand would affect development works and slow down their implementation, although it has largely failed to budge the government.
Last month in a letter to the finance minister, the WB has asked the government to "temporarily put on hold" local procurements of its ongoing projects, saying the amendments made in the PPA are not consistent with the Bank's procurement guidelines.
The WB has raised objections to several key amendments such as lottery system to break a tie in bidding, allowing inexperienced contractors for development works and rejecting bids with price above or below five per cent of the official estimate.
Bank officials and experts have said the newly-introduced changes would breed corruption and nepotism and favour contractors close to the ruling party.
Finance minister AMA Muhith, however, has rejected growing criticism about the amendments, saying the changes have been brought to speed up public works in the country.
World Bank lends Bangladesh more than one billion dollar a year, making the country one of the top recipients of its soft credit. This year it has promised to scale up assistance to help Dhaka counter the effects of global recession.
The WB official said the proposed Padma Bridge construction project for which it has offered around half a billion dollars would not be affected by the Bank's decision as it is still under negotiation.
Another top development lender, the Asian Development Bank, has also objected to the government's amendments of the PPA, as it found the changes in-consistent with its procurement guidelines.
Together the two agencies bank-roll lion's share of the country's development spending in infrastructure and human capital.
The World Bank will revise financial agreements on 24 of its funded projects in Bangladesh after the government amended procurement laws ignoring the lender's objections, officials said.
The decision by the country's biggest anti-poverty donor would involve development works and services worth US$2.50 billion including some key infrastructure and humanitarian projects.
Officials of the bank's Bangladesh office said recent changes in the public procurement acts and related rules by the government prompted it to decide signing "revised contract paper" for the projects
"We will send revised contract paper for each of the 24 projects to the government's Economic Relations Division for signing soon," a WB official said, speaking on condition of anonymity.
Bank officials said the projects include $350 million Siddhirganj peaking power plant, $109 million emergency cyclone recovery and restoration work, $210 million rural transport improvement project and $149 million Dhaka supply and sanitation work.
In addition, the bank is also seeking revised deals on $300 million health, nutrition and population sector programme, $250 million enterprise growth and modernisation project, $150 million second primary education development programme and $102 million water management improvement project.
Officials said the revisions would affect local purchases within the projects, since the government's amendments to the Public Procurement Act (PPA) and Public Procurement Rules are mainly related to works and goods procured from Bangladeshi sources.
ERD secretary M Musharraf Hossain Bhuiyan said the World Bank has informed him about the move but he would not comment unless he sees details of the proposed deals.
"Let me first know about the World Bank's revised proposals. We'll take further steps after consulting with other government agencies which are implementing the projects," he told the FE.
Experts and officials have said the Washington-based lender's tough stand would affect development works and slow down their implementation, although it has largely failed to budge the government.
Last month in a letter to the finance minister, the WB has asked the government to "temporarily put on hold" local procurements of its ongoing projects, saying the amendments made in the PPA are not consistent with the Bank's procurement guidelines.
The WB has raised objections to several key amendments such as lottery system to break a tie in bidding, allowing inexperienced contractors for development works and rejecting bids with price above or below five per cent of the official estimate.
Bank officials and experts have said the newly-introduced changes would breed corruption and nepotism and favour contractors close to the ruling party.
Finance minister AMA Muhith, however, has rejected growing criticism about the amendments, saying the changes have been brought to speed up public works in the country.
World Bank lends Bangladesh more than one billion dollar a year, making the country one of the top recipients of its soft credit. This year it has promised to scale up assistance to help Dhaka counter the effects of global recession.
The WB official said the proposed Padma Bridge construction project for which it has offered around half a billion dollars would not be affected by the Bank's decision as it is still under negotiation.
Another top development lender, the Asian Development Bank, has also objected to the government's amendments of the PPA, as it found the changes in-consistent with its procurement guidelines.
Together the two agencies bank-roll lion's share of the country's development spending in infrastructure and human capital.