Plagued by Corruption
The World Bank has recently cancelled funding for the Padma Bridge project in Bangladesh amidst allegations of corruption, thus jeopardizing the country’s most ambitious project to date.
ore than often, infrastructure projects in South Asia meet their demise in the throes of corruption, sometimes even before the project has materialized. The menace of corruption has taken its toll on the developing world in more ways than one. The Padma Bridge Project in Bangladesh is the most recent deal to bite the dust amidst allegations of corruption in the operations and execution of the project.
In late June this year, the World (Islamic Development Bank).
As per regular procedure, the WB launched an investigation against SNC-Lavalin, of which it informed the Bangladeshi officials last August, postponing loan disbursement for the project. The Bank claimed to have found irregularities in the appointment of a consultant and the selection of construction firms for the project, submitting a formal report to the Bengali Finance Minister in this regard, who agreed to blacklist SNC Lavalin to guide lenders about the progress of the investigation.
The first proposal was not implemented by Bangladeshi officials. The Finance Minister issued a prompt statement following the WB decision to cancel funding, stating that, “the problem with these proposals was that we were forced to admit the corruption allegations before they were substantiated.”
As for the second proposal, the ACC was already investigating into the Bank cancelled funding for the Padma Multipurpose Bridge Project on grounds of ‘high-level’ corruption among Bangladeshi government officials, private individuals involved with the project, and the executives of SNCLavalin: a Canadian company that won the bid for supervision consultancy during construction of the bridge.
This would have been the largest bridge in the country, involving a total construction cost of $2.9 billion. Bangladesh’s GDP growth was expected to increase by 1.2 percent on completion of the project.
In April 2011, the World Bank agreed to provide $1.2 billion credit for the project, making it the largest contributor amongst all development partners (DPs). Other DPs involved in the project included JICA (Japan International Cooperation Agency), ADB (Asian Development Bank) and IDB
By Sijal Fawad from the bidding process. The matter was later taken up by the Anti-Corruption Commission of Bangladesh (ACC) for investigation.
Continuing with the Canadian investigation at their end, the WB found two officials of SNC-Lavalin guilty of corruption, with one of them claiming to have offered commission to some key Bangladeshi officials, including bureaucrats and politicians, in exchange for getting the company selected for the job.
The WB demanded the government to take three measures in light of their findings. First, to send all suspected government officials on leave until the completion of the investigation. Second, to appoint a special team within the ACC to look into the matter and, third, to share all investigative information with a designated panel of the WB, created specifically matter. But with respect to the third, there was some hesitation as the ACC is an independent body, not answerable to any foreign agency. Yet, the organization agreed to share information and receive advice not just from the WB but from all development partners involved in the Padma Bridge project.
The Bank, however, was not content with the government’s response and in a statement issued on June 29, made a special mention that “In light of the inadequate response by the Government of Bangladesh, the World Bank has decided to cancel its $1.2 billion IDA credit in support of the Padma Multipurpose Bridge project, effective immediately.”
For Bangladesh, the Bank’s decision leaves a rather sorry mark, affecting the country’s image and perception amongst international institutions.