Washington:
In a setback to Bangladesh, the World Bank has cancelled with immediate effect its USD 1.2 billion financial assistance to the Padma Bridge project, citing massive corruption in the programme.
In a strongly worded statement, the World Bank said that the Bangladesh government has failed to take any action to check corruption despite its repeated reminders.
"In light of the inadequate response by the Government of Bangladesh, the World Bank has decided to cancel its USD 1.2 billion (International Development Association) credit in support of the Padma Multipurpose Bridge project, effective immediately," the statement said.
"The World Bank cannot, should not, and will not turn a blind eye to evidence of corruption. We have both an ethical obligation and a fiduciary responsibility to our shareholders and IDA donor countries. It is our responsibility to make sure IDA resources are used for their intended purposes and that we only finance a project when we have adequate assurances that we can do so in a clean and transparent way," it said.
In an unusual detailed statement, the World Bank said it has credible evidence corroborated by a variety of sources which points to a high-level corruption conspiracy among Bangladeshi government officials, SNC Lavalin executives, and private individuals in connection with the project.
The 6-km long Padma Bridge is a multipurpose road-rail bridge across the Padma River to be constructed in Bangladesh to link the country's underdeveloped south with the capital Dhaka and the main port of Chittagong.
The World Bank said it provided evidence from two investigations to the prime minister, as well as the minister of finance and the Chairman of the Anti-Corruption Commission of Bangladesh (ACC) in September 2011 and April 2012.
"We urged the authorities of Bangladesh to investigate this matter fully and, where justified, prosecute those responsible for corruption. We did so because we hoped the government would give the matter the serious attention it warrants," it said.
In Canada, where SNC Lavalin's headquarters are located, after executing numerous search warrants and a year-long probe based on a referral from the World Bank, the Crown Prosecution Services brought corruption charges against two former SNC executives in connection with the Padma Bridge Project.
Investigation and prosecution are going on but the court filings to date underscore the gravity of this case, it said.
"Because we recognise the importance of the bridge for the development of Bangladesh and the region, we nonetheless proposed to proceed with an alternative, turnkey-style implementation approach to the project provided the Government took serious actions against the high level corruption we had unearthed," the bank said, adding it would be irresponsible of
the Bank not to press for action on these threats to good governance and development.
To be willing to go forward with the alternative turnkey- style approach, the Bank sought the several actions, the statement said.
It asked to place all public officials suspected of involvement in the corruption scheme on leave from Government employment until the investigation is completed.
It also asked to appoint a special inquiry team within the ACC to handle the investigation, and finally agree to provide full and adequate access to all investigative information to a panel appointed by the World Bank that comprised of internationally recognised experts so that the panel can
guide the lenders on the progress, adequacy, and fairness of the investigation.
"We worked extensively with the Government and the ACC to ensure that all actions requested were fully aligned with Bangladeshi laws and procedures. We proposed that when the first bids would be launched, the Bank and the co-financiers would decide to go ahead with project financing if they had determined, based on the Panel's assessment, that a full and fair investigation was under way and progressing appropriately," the Bank said.
"In an effort to go the extra mile, we sent a high-level team to Dhaka to fully explain the Banks position and receive the government's response.