Reinstating Padma Bridge loan technically possible: WB
The World Bank (WB) has said that reinstating Padma Bridge loan is technically possible as it has few such precedents.
"The World Bank has a few precedents in its history of reinstating a cancelled loan in other countries, so it is technically possible", the multi-lending agency said in a clarification to some comments and concern raised among public regarding the cancellation of the loan by the Bank and the prospect of the bridge project.
The Bank, however, referred to the discord on two proposals made to the government to continue the credit and said that the scope to review its decision would be little "in the current circumstances".
"However, there is little scope to revisit the decision in the current circumstances, as the Government was unable to agree to two measures deemed important in the conduct of a full and fair investigation into evidence of corruption," it said.
The Bank in the clarification titled "Frequently Asked Questions Related to the Cancellation of the World Bank Credit for the Padma Multipurpose Bridge Project" also said that the cancellation of Padma Bridge loan would not affect on-going operations funded by the Bank, and it "will continue to work closely with the government and local stakeholders to support efforts to build a better life for the citizens of Bangladesh".
The Bank's current portfolio consists of over 30 projects with commitments amounting to about US$4.4 billion. These projects, among others, support the development of Bangladesh's health and education systems, the improved provision of local services, the increased use of renewable energy and the economic empowerment of women.
During the past fiscal year, which ended in June 2012, the Bank approved over US$860 million zero interest IDA credits, supporting among others, primary education, strengthening of local governments and improving access to and quality of water supply in rural areas. Disbursements in FY12 were about $500 million, significantly exceeding the average of the previous three years.
The Bank, however, said that it would undertake greater oversight in areas where financial risks remain substantial. This will include independent financial transaction reviews using forensic accounting techniques to uncover patterns of fraud and corruption, project-specific efforts to strengthen capacity and systems for good governance and opening up of doors and windows wide in Bank- financed operations, through greater access to information and increased citizen participation for better transparency and accountability for results.
The Bank in its 4-page clarification also explained its action and position regarding communicating the government its findings from the investigation and why did it cancel the loan one month ahead of the effectiveness deadline for the project.
"Given the tremendous economic and social benefits of the bridge for the people of Bangladesh, the World Bank was not willing to let it go without a struggle to save the project," the Bank said while justifying the early cancellation of the loan.
The Bank also denied that it favored certain firm over others in the pre- qualification process for the bridge construction and decision of cancellation of the loan a personal statement rather than that of the institution.
Finally, it said the Bank has been a strong partner in supporting Bangladesh in these efforts, and would remain committed to helping Bangladeshis rise out of poverty and achieve their dream of a prosperous and empowered nation, built on a foundation of good governance.