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Friday, January 27, 2012
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Padma Bridge Project

WB extends loan activation time

Waits for outcome of Canadian probe into graft allegation

The World Bank has extended the deadline for loan activation for the Padma Bridge project by six months, reviving the hope that the lending agency might eventually unblock the fund.

WB's decision comes as the Canadian government is still continuing its probe into graft allegations surrounding the project.

WB's Washington headquarters yesterday informed the Economic Relations Division (ERD) of Bangladesh about the deadline extension, an ERD official said.

The previous deadline for effectuation is scheduled to expire today. Not extending the deadline would have meant that WB was finally dropping the funding of the project.

The bank in August last year temporarily suspended its funding for the project on graft allegations, and the date for loan effectuation was extended till January 27, 2012.

Asked about the latest extension, WB Country Director Ellen Goldstein in an e-mail told The Daily Star, "Canadian law enforcement agencies are currently undertaking an investigation into fraud and corruption in the Padma Bridge project. As part of its essential due diligence, the Bank needs to await further results from that investigation before deciding whether to proceed with its $1.2 billion investment."

She also said, "To expedite the investigation, we urge the Bangladeshi anti-corruption authorities to work closely with the Canadian Government. The Bank is also conducting its own investigation, and if warranted, will bring proceedings before its Sanctions Board to debar companies and individuals that have engaged in fraud and corruption."

About the WB country director's suggestion, Anti-Corruption Commission (ACC) Chairman Golam Rahman told The Daily Star, "We have already through our attorney general sought help of the Canadian authorities."

Rahman said, "We have told the authorities to send us the findings of the investigation carried out by the Canadian government. If we receive it, we will take necessary steps."

Immediately after WB had suspended funding for Padma Bridge, two other major financiers for the project Asian Development Bank (ADB), and Japan International Cooperation Agency (Jica) also extended their loan activation dates which are scheduled to expire next month.

The ERD official said after WB's extension, ADB and Jica are also likely to extend their deadlines.

In the first week of this month, ERD sent letters to the three donors to extend the loan activation deadlines by three months.

In September last year, WB made allegations of corruption against former communications minister Syed Abul Hossain and his family business Sahco in connection with the project, and suspended the funding.

The bank was supposed to provide $1.2 billion of the $2.9 billion earmarked for the project.

Later, the government moved Abul Hossain to another ministry, and changed the director of the project.

In December last year the WB country director went to the bank's headquarters in Washington and held discussions with the high-ups there about the project's funding.

After returning to Dhaka in the second week of January Ellen Goldstein met Finance Minister AMA Muhith.

After the meeting both the minister and the WB country director told journalists that the bank would inform about its decision regarding the funding within the month.

A finance ministry official said WB will not take any decision regarding lifting of the fund suspension until the report of the Canadian government's investigation into the graft allegations is available. The official hoped that the matter will be settled within the next six months.

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We have seen the statement of our prime minister and now the WB action to unlock the loan after activation of the loan agreement in due course. I am sure these two incidents have no connection but have co-relation so far the Padma Bridge construction is concerned.

: faqrul

Scotland yard could've done the job better as it goes without saying that the tail wags the bridge project and it is ridiculous enough .

: London Eye

Comments

  • Anonymous
    Friday, January 27, 2012 04:51 AM GMT+06:00 (131 weeks ago)

    It's sad to see that the US and the World Bank value Hilary Clinton's friendship with one man over the development of a whole country.

  • drkarim
    Friday, January 27, 2012 06:32 AM GMT+06:00 (131 weeks ago)

    By investigating quickly and giving names and illegal contracts will help the mass people of a poor country. Canadian authority shouldn't play games like US played PL480 game before bringing military rule in Bangladesh by destroying democracy. So, All stakeholders are on notice.

  • Sellma
    Friday, January 27, 2012 05:09 AM GMT+06:00 (131 weeks ago)

    I hope the Canadians have written and voice evidence so that we can put some big Awami League thugs behind the bars in Canada at least because here in Bangladesh they operate as a Mafia so nothing will happen to them.

  • Iftekhar Hassan
    Friday, January 27, 2012 04:32 AM GMT+06:00 (131 weeks ago)

    World Bank decision is correct step in right direction. Up until three months ago I was feeling very positive about the government. However, I no longer trust the leadership of Hasina for a number of reason. No. 1 is: Over the past 45 days and so this government let the Taka slide against dollar from 69 to almost 85 now. It is a disaster for the poor of Bangladesh who makes less than Tk 10,000 per month as this will create huge inflation.


 

 


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