The Finance Minister feels the World Bank external panel’s report on the Padma bridge project did not ‘properly’ state the ‘unjustified and unnecessary’ cancellation of the loan.
Abul Maal Abdul Muhith also found ‘an important factual and chronological inaccuracy’ in the report which he termed ‘unfortunate’.
The minister made the comment in a letter to the Chief of External Panel of Experts Luis Moreno-Ocampo in his response to the report which the bank’s Country Director for Bangladesh Johannes Zutt handed him on June 11.
In the letter, a copy of which is available with bdnews24.com, the minister requested the global lender to publish his reply on the Integrity Unit’s website for what he said ‘to present the position on the Padma bridge project correctly’. The Bank posted its own report on the website.
An official in Dhaka office, however, told bdnews24.com that according to their rules they cannot publish any content other than the Bank on their website.
The minister once again took a dig at the immediate past President Robert Zoellick and said ‘without any valid reason’ the bank was in a hurry to make a decision “as the term of the incumbent President was expiring, and took a wrong, unnecessary and uncalled for decision to cancel the loan on June 29, 2012”.
He said in the past Integrity Office carried out investigation on seven cases in Bangladesh and “the projects were never held up during investigation”.
“Some of the projects resulted in withdrawal of World Bank from financing certain components of a project,” he said.
The Washington-based global lender suspended its pledged $1.2 billion credit in the $2.9 billion project on June 29 last year just before Zoellick was to leave his office, raising allegations of corruption conspiracy involving ministers and top government officials.
The government denied the allegations outright and ordered the Anti-corruption Commission (ACC) to investigate them, which centred round the awarding of the project’s consultancy to Canadian construction giant SNC-Lavalin.
The Bank has banned SNC for 10 years accusing it of ‘misconduct’ in the Padma bridge project.
As the new President Jim Yong Kim took office, the government made a request to reconsider the earlier decision which was reciprocated positively.
The Bank sent an external panel last year to probe corruption allegations with the ACC. But, as the imbroglio dragged on and on, in January Bangladesh withdrew the request.
The minister in the letter said they had ‘voluntarily’ requested the cancellation of the loan as the implementation timeline did not match and feared ‘hurting’ of relationship with the global lender which “might begin to spill over into our larger development partnership”.
Muhith said with the removal of Padma irritant, the relationship with the Bank had been “restored to earlier cordiality”.
The World Bank has selected projects where the $1.2 billion funds for Padma bridge would be diverted.
It already gave $500 million in social safety net and $400 million in embankment project while 300 million would be given for building food silos across Bangladesh.
Muhith said during his stint as Finance Minister he received four complaints from the Integrity Office in May 2011 and initiated action on all of them.
“In the case of Padma the World Bank held up effectiveness of the credit and made sure that no corruption would take place,” he wrote.
He said he had requested the new President to review the decision as he found ‘no reason’ for cancellation of the loan in June 29 last year with a month to expire.
“When the loan was cancelled the loan expiry date was still a month away, and all action on processing the project was already halted and discussions with the Bank on how to handle the investigation were going on in high gear.
“On our part we were also discussing with other co-financiers at that time and they were most likely unaware of what was happening in Washington,” he wrote.
‘Fortunately’, Muhith observed, the new President decided ‘to reconsider the decision’ of his predecessor and “we arrived at an arrangement for managing the project, and the terms of the agreement were spelt out in the LOU and TOR”.
He said he felt that “the unjustified and unnecessary” cancellation of the loan needed to be properly stated “when your report is published for public information”.
The minister replied to some specific points that the panel pointed out in their report after ‘carefully studying and examining’ the contents.
The panel recommended inclusion of the former Communication Minister Syed Abul Hossain in the first information report (FIR) of the ACC.
He replied the allegation that the minister made a deal with the officials of SNC Lavalin was not supported by “any corroborative evidence” when the ACC lodged the FIR.
As the report mentioned about the legislative developments relating to foreign bribery in the US, UK, China and Canada, Muhith wrote “in Bangladesh also a promise to offer bribe is an offence”.
“At the same time it is also a fact that a case of this nature is being tried for the first time both in Canada and Bangladesh” which he mentioned as the ‘difficulties’ in pursuing such cases.
He appreciated some recommendations on how the Bank could ensure the prevention of bribery conspiracies.
But he said one of the problems with the evidence that the Integrity Office provided was that “it is provided in such a fashion that any lead on further investigation is rarely suggested”.
He also maintained that the Integrity Office had not shared all evidence with the ACC “until after your intervention in Nov 2012”.
“Thereafter ACC moved with decisive speed and resolve.”
He mentioned how Bangladesh responded after the allegation. His government began the national investigation on Padma ‘corruption conspiracy’ in October 2011 “as soon as it was reported to us by the Integrity Office”.
“And as soon as we became aware of the corruption conspiracy by SNC Lavalin, we tried to frustrate it by recommending the blacklisting of SNC Lavalin”.
Muhith said Bangladesh government “removed and distanced those public officials against whom there were well-founded suspicions of complicity in the conspiracy”.
“Bangladesh government readily agreed with the appointment of an external panel of experts and in order to avoid legal complications made only one point that the panel in its relationship with the ACC will work as the agent of the Bank.
“We not only agreed to but also helped in detailing the alternative implementation arrangement for managing the loan,” he further wrote in the letter.
He said the actual terms of references were worked out after the review of the case was agreed to by the new President and it was finalised in September 2012.
The minister also took pride to say that Bangladesh was going ahead with implementation of the project on its own resources and that the investigation was on. “It seems that seeking evidence from Canada will be considerably delayed.”
He also recalled Bangladesh and World Bank’s ‘continuing partnership’ and said Bangladesh “greatly value” the relationship.
The current portfolio of Bangladesh and World Bank relationship stood at $4.5 billion in 36 projects.
He also thanked the external panel for their “understanding and support” in fighting corruption and preventing it.
“We greatly appreciate your professionalism and wise counsel. Our prosecutors and investigators learnt a great deal from you,” he wrote.
Source: Bd news24
