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Padma Loan Cancellation

Govt wants WB to review decision

Muhith says WB's evidence not acceptable

Staff Correspondent
The government hopes that the World Bank will reconsider its decision to cancel the funding of the Padma bridge project, Finance Minister AMA Muhith said yesterday.
Muhith held a press conference to clarify the government's position a day after the global lender cancelled its $1.2 billion credit for the project claiming to have proof of a corruption conspiracy involving Bangladeshi officials, executives of a Canadian firm and private individuals.
He said the executive director, who represents Bangladesh at the bank, had been continuing talks with WB officials on the matter.
In his statement, the minister said the government had kept the other financiers informed about its steps and hoped that they would analyse
the WB's step.
"In order to reach an understanding with the World Bank and keep the Padma bridge project completely free of corruption, we had accepted many of its demands," Muhith told journalists at his office in the capital yesterday evening.
"Our purpose was to resolve the matter in such a way that we would not have to sign any humiliating memorandum of understanding over possible corruption, and the Anti-Corruption Commission would not accept any terms of reference with a foreign panel in order to maintain its independence.”
Muhith said the government wanted to reach an understanding with the WB by exchanging letters with it on the project's implementation and the issue of continuing the probe.
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“And to that end, we accepted many of the World Bank's conditions by relaxing our rules and regulations.
"Despite all this, it is really undesirable and mysterious that the World Bank cancelled the loan and issued a humiliating notice,” said the minister, urging the bank to reconsider its decision.
The WB on Friday cancelled its funding for the project, saying it had “credible evidence corroborated by a variety of sources which points to a high-level corrup-tion conspiracy among Bangladeshi government officials, SNC-Lavalin executives and private individuals in connection with the Padma Multipurpose Bridge Project.”
The project’s major donor also said, "The World Bank cannot, should not, and will not turn a blind eye to evidence of corruption. ”
Muhith noted that theWB had said it had given Bangladesh credible evidence on corrupt practices. “But their credible evidence is not acceptable to us because the evidence comes from statements of individu-als whose names are unknown to us; and whose names they [the WB| would not give us... which is their (WB's) technique.
“Their credible evidence will be credible in our law when witnesses can be found.”
Muhith said the Canadian authorities had sat with the government but refused to give Dhaka the evidence saying it would hinder their investigation.
“The World Bank has produced one credible evidence — writings from a personal diary of the accused person of the Canadian company [SNC-Lavalin], This writing is not acceptable
to our court or any other court in the world until it is independently corroborated.
“So, their claim of having credible evidence is completely meaningless."
The minister said he would discuss the matter in detail at today’s parliament session.
Muhith refuted the WB's allegation that Bangladesh did not take appropriate steps to prevent a corruption conspiracy.
He produced before the media some government correspondence with the World Bank. The minister, however, did not show any correspondence from the lending agency for the sake of the ongoing investigation.
The government had been exchanging letters with the WB for the last nine months, he said, adding: “We have taken steps to remove the World Bank's suspicion.
"For example, we have brought about changes in leadership in the bridge's project. It seems that the World Bank did not take those into cognisance. Rather it [the bank] recommended further investigation into the appointment of the construction contractor, focusing its attention on the consultant.”
The finance minister said the bank asked for an intensification of the investigation having taken into consideration the activities of the Canadian authorities.
The ACC opened a probe in August last year and gave a report on the matter to the bank in February, he said and added, “From time to time we only inquired about the progress of the investigation. We came to know that the World Bank did not provide any additional evidence in support of the accusation it had made. The AntiCorruption Corruption has
been carrying out the inquiry inks own way.”
When a WB team held talks with the Economic Relations Division (ERD) and the ACC early last month, the government requested the team to view the allegation and the project's implementation as two issues instead of linking the two.
The bank sent another team to Dhaka on June 23 for further discussions with the ERD and the ACC. This time the WB gave three conditions, two of which the government did not agree to accept -- signing a Memorandum of Understanding with the bank and a Terms of Reference with a panel of foreign consultants.
The ACC was looking into the allegations independ-endy and the government could not form a judicial commission for the same, Muhith said replying to a query. “But if the government, the Anti-Corruption Commission and the World Bank agree on that matter [forming a judicial commission],! have nothing to say."
The minister, however, stopped halfway a reporter's question on a WB report that mentioned former communications minister Syed Abul Hossain's involvement in the alleged graft conspiracy.
Interrupting the reporter, he said, "I shall not comment on this matter. I do not know from where you have 'stolen' this [information]. And I am not going to give you the letter [the WB report on corruption given in last September).
On whether Prof Muhammad Yunus had anything to do with the cancellation of the funding as some quarters would suggest, Muhith said, “I do not know anything."
Asked about alternative
funding, the minister said there were two designs for the project. The one that was chosen is aesthetically beautifully and cosdier. “If there is a fund crisis, we will go for the cheaper one.”
Terming the WB as one of Bangladesh's "friendly organisations," he said since liberation the bank had given the country $1,680 crore for 251 projects. At present, 35 WB-financed projects worth $495crore are going on.
Muhith expressed his hope that the other WB-funded projects would continue smoothly even after the cancellation of the Padma bridge funding.
THE PROJECT
The project's work has remained stalled since September last year amid graft allegations forcing the government to engage further with the WB in settling the issue and also look for alternative funding for the $2.9 billion project.
The proposed 6.2-kilometre (3.85 miles) bridge over the Padma river was to connect the capital with the country's 16 southwestern districts. The bridge was to have a road and rail line.
The WB apart, the Asian Development Bank pledged a $615-million loan for the project. Japan International Cooperation Agency (Jica) and Islamic Development Bank (IDB) also signed agreements with the government on making available $400 million and $140 million respectively.
The WB's credit cancellation will mean a further delay in implementing the project, which is considered crucial for about 30 million people in the southern region expected to benefit from the new road and rail connections.
At present, all traffic across the Padma relies on ferries.
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