State Minister Iqbal Hassan Mahmood said Wallich should not make comments solely on the basis of a newspaper item. "You should make comments after scrutinizing the procurement process in the power sector," he added.

He pointed out, "It should be checked whether the newspaper item or the correspondent who has covered the news report is biased or not," and questioned, "How much honest he is?"

Earlier, addressing the inaugural session of a two-day international workshop on Infrastructure Financing at the Bangladesh Dhaka Sheraton Hotel, Wallich alleged that, due to lack of corporate governance, serious corruption is occurring in the infrastructure, especially in the power sector of Bangladesh.

"Over the past 6 years, some 15 power plants have been publicly tendered but only 3 were awarded. The procurement process followed was questionable and non-transparent and not in the interest of good outcomes for Bangladesh," she said.

"Had the tendering process not been undermined, two world-class project finance structures --Meghnaghat II and Sirajganj --could already be providing 900 MW of very low-cost power to the system. Instead, we now see load shedding of about 900 MW a day, expensive suppliers credits, and contingent liabilities, for the government," the WB country director said.

Against a plan of adding 3000 mw by 2007, Wallich sees only 730 mw in the pipeline --an amount that does not even meet the current shortfall.

Commenting outside her scripted speech, Wallich referenced a report in yesterday's Daily Star that described the government's ill-conceived crash programme to add 430 mw power by the next election, and said, "In the Fenchuganj power project, there has been repeated re-tendering [six times]…This happened because of someone's personal interest [to grab the project]."

Iqbal Hassan Mahmood defended himself, saying, "The Daily Star report is not an indicator for corruption. You send your men and check it yourself. Bring all your multilateral donors and tell us where we have corruption."

Then he said, "Where will you not find corruption? It is in every country."

Noting the Sirajganj 450 mw project, which was cancelled after finalisation on political reasons, Mahmood said, "The Sirajganj project was a killer for the country."

Mahmood claimed that the repeated re-tenderings of various power projects are taking place according to the guideline of the WB to maintain transparency in the tendering process.

"I think the guideline of the WB for the procurement process should be changed," the state minister said.

During his recent visit to Dhaka, Paul Wolfowitz, the World Bank president, had also expressed concerns about large-scale corruption in power projects. The WB had also previously written letters to the government expressing the same concerns.

Last year the government lost a 45 million Euro German grant when the Rural Power Company Ltd (RPCL), a concern of the Rural Electrification Board (REB), refused to open books for an international auditing. The Daily Star had reported a massive corruption bid in the RPCL.

The Daily Star is regularly reporting how corruption attempts have led to six terms of tendering for the 90 mw Fenchuganj bid - which ultimately went to a disqualified company - the faulty deal for the Meghnaghat 2 bid, the faulty bid handling of the Chandpur 150 mw plant and many other stories related to power projects. So far, with the exception of a couple of weak rejoinders, the government has not protested these reports.