More than $600 million loans from the World Bank and ADB have not been released due to the government's failure to set up an independent institution to enrol educational institutions in monthly payment order (MPO) and fulfil other conditions.
Finance and Planning Minister M Saifur Rahman yesterday told reporters that a $100 million fund is not being released as the independent institution is yet to be set up.
Besides, $200 million earmarked for flood rehabilitation programme, $50 million for a project of Power Development Board (PDB), $60 million for Local Government and Rural Development (LGRD) and $200 million loans for health, communications and power ministry are also stuck up, sources said.
Saifur, after a discussion on the stuck up loans at an inter-ministerial meeting, admitted that
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schools and colleges get enlisted for MPO by means of power and influence.
"They [donors] are now saying that an independent body has to be constituted. That body will inspect a particular school or college and if an institution qualifies under the set criteria that will be awarded with MPO," he said.
The minister however said the education ministry has informed him at the meeting that paper work on the establishment of the independent institution has almost been finalised. The institution will be set up by this month, he told reporters.
"Some of World Bank and ADB projects are moving slowly whereas some others are not being implemented for various reasons. Consequently the funds for these projects are not being released," Saifur said.
The rise of petroleum prices has already put a tremendous pressure on the country's foreign exchange reserve. Moreover, the WB and ADB have not released the pledged funds, increasing the pressure on balance of payment and resources, he explained.
Referring to the $200 million flood rehabilitation project, which is to be undertaken mostly in Sylhet, Saifur said roads for the rehabilitation have been identified, evaluation completed and the WB consultant has okayed the tender process.
"But the World Bank's local office is claiming that the allocation for some of the roads have been higher than they should be and on this ground they have stopped release of the loan," the minister explained.
As the government is yet to corpora-
tise the Dhaka Electric Supply Authority (Desa), a lot of money is stuck up in the power sector, he pointed out.
The power ministry officials however told Saifur at the meeting that they are going to do it very soon. Hardly inspired by the assurance, the minister said: "They always tell me they are doing it, but let's see if they can really do it by the time they have promised."
Again, there was a communications ministry project of constructing an access road to the Chittagong Port outside the city but a dispute over revenue sharing between the city corporation and the ministry is delaying the project.
"If Chittagong City Corporation is given a share, all other city corporations will demand the same, which is not possible. It is against our fiscal discipline," Saifur said.
Recently the WB has sent a report on the assessment of fiscal policy in Bangladesh, outlining various factors that impede Bangladesh's getting foreign aids.
Mentioning that there is about $7 billion aid in the pipeline for Bangladesh, the report pointed out that the institutional and procedural bottlenecks on the part of the government and donors are impeding the smooth release of foreign grants.
The review also mentioned that Bangladesh has been experiencing a decline in net foreign financing, from 4.8 percent of GDP in FY90 to around 2 percent in FY01-03. Net foreign financing reached a 15-year low of 1.1 percent of GDP in FY04.