World Bank revives funding after Hasina government fulfils its demands

After months of bitter controversy compounded by suspense and wrangles, the World Bank has finally decided to revive its funding for the $2.9 billion Padma Bridge — a dream project for Bangladesh

The decision was formally announced by the world’s biggest lending agency’s Board meeting in Washington on Friday .

The World Bank cancelled its $1.2 billion credit of the $2.9 billion project on June 29 this year over allegations of corruption — repeatedly denied by Bangladeshi authorities . Though the Bank had not released the funds , it remained rigid on not reviving the loan till the Sheikh Hasina government agreed to its conditions .

The Bank listed four conditions for loan revival — removal of Communications Minister Syed Abul Hossain; sending Prime Minister’s Economic Affairs Adviser Dr. Mashiur Rahman; and Bridge Division Secretary Mosharraf Hossain Bhuiyan on leave; and allowing the bank’s consultants to work with the Bangladesh Anti-Corruption Bureau (ACC) to probe onto the allegations of corruption.

Displeased with WB’s decision to cancel the loan, the government levelled allegation against the Bank of “letting down” the country. The ruling party also found presence of politically motivated “lobbyists” and said they had tried to block the important development project.

However, the government finally removed the Mr. Hossain; sent Mr. Bhuiyan on leave; and agreed to allow the bank’s consultants to work with the ACC. The government also agreed to disengage Dr. Rahman, facilitating the ultimate revival of the loan. Both Mr. Hossain and Dr. Rahman have repeatedly denied their involvement in the charges. They have also wanted the World Bank to make its allegations public, which it has not yet done.

The allegations gave Ms. Hasina’s government jitters as it braced for elections to be held late next year. On the one hand, government’s rivals got opportunity to campaign against it; on the other, the government found it difficult find alternate sources of funding. The situation turned more difficult once the Asian development Bank (ADB); Japan International Cooperation Agency (JICA); and Islamic Development Bank (IDB) decided to put their funding on hold following WB’s withdrawal.

The 6.15-km bridge on the river Padma is to connect south-western Bangladesh, involving 19 districts and the capital — enhancing their access to markets; improving services; and accelerating growth.

While reviving the loan, a World Bank statement said, it will remain “vigilant to any signs of corruption in the Padma bridge project….”.The bank, however, admitted that “ if implemented properly, the bridge has the potential to deliver remarkable benefits to the people of Bangladesh, who deserve transparent use of public money, clean implementation of the project and a high-quality bridge to spur growth and development for years to come.”

World Bank Statement of September 20, 2012 on Padma Bridge

September 20, 2012

WASHINGTON—On June 29, 2012, the World Bank announced the cancellation of a $1.2 billion IDA credit for the Padma Multipurpose Bridge Project. The Bank’s investigative unit previously shared with the Government of Bangladesh credible evidence of corruption related to our financing of the bridge, and the Bank had identified a series of clear measures to be implemented by the Government for the Bank to remain engaged with the project, which the Government of Bangladesh had failed to meet. These included: (i) placing all public officials suspected of involvement in the corruption scheme on leave from Government employment until the investigation is completed; (ii) appointing a special inquiry and prosecution team within the Bangladeshi Anti-Corruption Commission to handle the investigation; (iii) agreeing to provide full access to all investigative information to an external panel of internationally recognized experts so that they can give guidance to the Bank and co-financiers on the progress, adequacy, and fairness of the investigation, and; iv) agreeing on new implementation arrangements that gives the Bank and co-financiers greater oversight of project procurement processes.

Following our cancellation of the credit, the Government of Bangladesh took actions necessary to fulfill the above measures. The Government of Bangladesh has now begun to address the evidence of corruption the Bank identified. The World Bank understands that all government employees and officials alleged to have been involved in corrupt acts in connection with the project have been put on leave from Government service until an investigation is completed, and that a full and fair investigation is now underway.

In its communication with the World Bank about the fulfillment of these measures, the Government of Bangladesh requested the World Bank to consider again the financing of the Padma Multipurpose Bridge. The Government agreed to a series of measures as a pre-requisite for any renewed implementation. These include new procurement arrangements with enhanced oversight, to ensure transparency and clean construction of the bridge; investigations proceeding in a full, fair, and expeditious manner; and an independent External Panel to review the Government’s investigation and report their findings to the Government and the World Bank.

The Bank has agreed that, upon satisfactory implementation of the agreed measures by the Government, and with the support of the Bank’s governing bodies, the Bank will engage anew in the Padma Multipurpose Bridge.

The World Bank remains vigilant to any signs of corruption in the Padma Bridge project, and our determination to take a strong line against wrongdoing will never waver. If implemented properly, the Padma Bridge has the potential to deliver remarkable benefits to the people of Bangladesh, who deserve transparent use of public money, clean implementation of the project and a high-quality bridge to spur growth and development for years to come.

Those tried to block Padma project are enemies: Home Minister

Home Minister Mohiuddin Khan Alamgir on Friday said those who had tried to block the important development programmes, including the Padma Bridge project, are the enemies of the country.

“Those who had stood in the way of the country’s development projects, including Padma Bridge, are the enemies of the country. They’re enemies…They’re Mirzafars,” he said.

Mohiuddin Khan Alamgir was addressing a discussion meeting organised by Bangabandhu Sangskritik Jote’s Dhaka city unit at the auditorium of Diploma Engineers’ Institute, marking its 32nd founding anniversary.

The Home Minister’s remarks came hours after the World Bank announced to engage afresh in the Padma Bridge Multipurpose Bridge Project. The lead financer of the country’s mega project had cancalled its promised loan of $1.2 billion on June 29 this year.

Taking a swipe at opposition leader Khaleda Zia, the Home Minister said, “Khaleda and her associates never worked for the country’s development …they only inflated their pockets.”

Mohiuddin Khan also branded Khaleda and her allies as “conspirators”, and said they will always be known to the people of the country as “conspirators”. “People won’t forgive those who violate the human rights of the entire nation…we care little about them,” the Home Minister told the programme.

The discussion was held with Fatema Zaman Sathi, joint convener of Bangabandhu Sangskritik Jote’s Dhaka city unit, in the chair.

Dhaka, Aug 23 (bdnews24.com)—President Zillur Rahman on Thursday finally accepted the resignation letter of Syed Abul Hossain who had come in for bitter criticism over allegations of corruption in the Padma bridge project.

President’s Office Secretary Shafiul Alam confirmed bdnews24.com about the President accepting the resignation, a month after the former Information and Communication Technology Minister tendered it to Prime Minister Sheikh Hasina who forwarded it to the President after approving it.

His standing down paved the way for the government to renew negotiations with the World Bank for its promised funds for ambitious project.

The Cabinet Division issued a notification on Thursday declaring vacant the post of the former ICT Minister, Cabinet Secretary Md Mosharraf Hossain Bhuiyan told bdnews24.com.
With the exit of Abul Hossain, there is no minister or junior minister for the ICT ministry.

Hossain, who earlier served as the Communications Minister, was transferred to the ICT Ministry on Dec 5 last year after the Washington-based global lender raised corruption allegations in the country’s largest-ever infrastructure project.

Hossain denies the charges and claimed himself innocent.

When asked who will now take charge of the ministry, the Cabinet Secretary said that no order was there to assign anyone for the task. “As per law, if there’s no one to oversee a ministry then it goes under the Prime Minister.”

Beleaguered Abul Hossain had tendered his resignation letter on July 23, almost 10 months after corruption charges surfaced. According to the government sources, he decided to quit in the interest of fair investigation into the allegations.

Elected in each parliamentary elections in 1991, 1996, 2001 and 2008 from Madaripur-3 constituency, Abul Hossain, who was inducted in Hasina’s cabinet on January 6, 2009, had served as the communications minister for about three years.

He also served as a junior minister in Hasina’s previous cabinet (1996-2001).

The World Bank on June 29 finally cancelled its pledged $ 1.2 billion fund for the $2.9 billion project, saying it had ‘credible evidence’ which points to a high-level corruption conspiracy among the Bangladeshi government officials, SNC-Lavalin executives and private individuals in connection with the 6.15-kilometre bridge construction project.

It defended its decision saying that the government did not meet its condition of sending the high officials against whom the corruption allegations were raised into mandatory leave.

After the fund cancellation, the government announced to build the bridge with its own fund if no other donor agency comes forward, but is still trying to persuade the World Bank to review its decision.

The Finance Minister has said that the government had already fulfilled all the conditions the World Bank had given to make the fund available.

Govt got time to deal with WB, says Muhith

Star Online Report

Finance Minister AMA Muhith on Friday said the government got some more time to deal with the World Bank to revive its credit for the Padma bridge project.

“We are very much optimistic about the revival of the Padma bridge loan with the World Bank,” he told reporters while coming out of his residence.

Japan International Cooperation Agency (Jica) extended its loan effectuation deadline by three weeks on Friday.

Earlier, the Asian Development Bank extended its loan effectuation deadline by another month on Thursday.

The loan effectuation date of the co-financers was due to expire on Friday.

The ADB and Jica came up with the extension in response to a request by the government. The Economic Relations Division (ERD) on Thursday wrote to the lenders for giving the government some more time to deal with the lead financer.

The WB cancelled its $1.2 billion credit for the Padma bridge project on June 29 for what it had said was a corruption conspiracy involving Bangladeshi officials, executives of a Canadian firm and individuals.

Later, the global lender in a letter to Prime Minister Sheikh Hasina proposed five new conditions for the government to ensure corruption-free implementation of the project.

WB Vice President Isabel Guerrer elaborated the steps the government has to take to get its funding for the massive project.

In her letter, the WB vice president said a high-powered investigation team has to be formed to probe the allegations of corruption in the bridge project, an independent firm has to be appointed to monitor implementation of the project.

Another condition is that the co-financiers will have to be actively involved in the procurement process for the bridge.

Besides, the WB suggested that as a long-term step, the government will take initiative to increase the capacity of the Anti-Corruption Commission (ACC).

The government has disagreed with some of the conditions, and asked the WB to revise those.

Work on the bridge project has remained stalled since September last year after the WB submitted a report to the government in September.

In April this year, the bank submitted a second report based on the findings of the Canadian government’s investigation into allegations of graft in appointment of a supervising consultant for the bridge.

Against this backdrop, the government has taken initiatives for finding alternative sources of fund and signed recently a memorandum of understanding with Malaysia for funding the bridge project.

On July 23, Information and Communication Technology Minister Syed Abul Hossain resigned from his position.

Abul tendered his resignation a day after the finance minister said the government had been considering accepting the WB’s fourth condition to persuade the global lender to review the cancellation of the Padma bridge loan.

Recently, highly placed government source said prime minister’s economic affairs adviser Mashiur Rahman has to resign to meet the conditions the World Bank has laid down to revive its credit for Padma bridge.

But the adviser has denied any involvement in the alleged corruption in the Padma bridge project, and said the government has not yet asked him to resign.

Syed Abul Hossain talking to journalists Monday

FE Report

Former communications minister Syed Abul Hossain claimed his innocence on Monday saying that he had no involvement in corruption nor any irregularities took place concerning the Padma bridge project.

“Those who talk about the possibility of corruption and irregularities in the Padma bridge project are mistaken and have a wrong perception,” he told journalists waiting outside the office of the Anti-Corruption Commission at Segunbagicha in the city after emerging from the ACC office, where he was quizzed.

Abul Hossain was called to the ACC office for interrogation for the second time over the allegation of corruption and irregularities in the process of selecting a supervision consultant for the US $ 2.9 billion infrastructure project.

“I am clear to my conscience, and to the Most Merciful Allah Rabbul Alamin. There was no corruption in the Padma bridge” Abul added.

A three-member ACC investigation team, led by one of its deputy directors Mir Md Zainul Abedin Shebly, quizzed the former minister for about two and a half hours starting from 9:50am.

Though the ACC refused to divulge details of the interrogation, Abul Hossain told the FE over phone that he was quizzed in connection with the supervision consultant selection process.

He, however, refused to give details about the questioning but said some of the questions were answered in the statement he gave to the media outside the ACC building.

The businessman-turned-politician criticised the media for what he called misguiding the people giving untrue information, especially the reports and articles about selection of a consultant.

“It was reported that someone made a transaction involving $35 million whereas the lowest bid for the supervision consultant appointment was worth $37 million. You can easily understand how untrue and absurd it was,” he said to the journalists.

He claimed that he worked with honesty, transparency, accountability, integrity, modesty and politeness.

“Honesty, transparency, accountability, integrity, modesty and politeness are the driving forces of my life. I want to lead the rest of my life with that strength,” Abul Hossain commented

Before getting into his car, he gave the media copies of his written statement.

He said, “Padma bridge, I myself and the government are victims of propaganda of a vested quarter,” he said alleging that the media propaganda created confusions among the mass people.

He also stated in the statement that as he had no involvement in the evaluation of any tender process, the World Bank’s apprehension about corruption in the Padma bridge project was simply an excuse.

In the three-page statement, the minister also pointed out that the World Bank would soon realise that it made a mistake by cancelling the loan agreement which delayed construction of the Padma bridge and damaged his own reputation.

The World Bank, the key lender of the coveted project, suspended its pledged $1.2 billion for the $2.9 billion project in September last year raising the graft allegations. It cancelled the promised loan on June 29 over no satisfactory action taken by the government in this regard.

A bdnews24.com report adds, an official of the anti-graft watchdog on Monday said it found no proof of corruption in appointing a consultant for the Padma bridge project in the agency’s initial investigation against former Communications Minister Syed Abul Hossain.

Mohammad Badiuzzaman, a Commissioner of the Anti-corruption Commission, made the statement as the commission completed its initial investigation into the allegation of corruption.

He said they would begin the next phase of investigation based on the report of the primary investigation.

“Our preliminary investigation ended with quizzing Syed Abul Hossain. Investigating officials will prepare a report and next steps will be taken based on that,” he said.

The report would be prepared ‘as soon as possible’, he added.

Responding to a query, Badiuzzaman said, “We haven’t found any proof yet about the allegations brought against him. However, legal steps will surely be taken against him if the next investigation finds anything.”

Padma negotiation with WB in final stage’

Abdur Rahim Harmachi
Chief Economics Correspondent

Dhaka, Aug 25 (bdnews24.com) —

Finance Minister Abul Maal Abdul Muhith has said the government is in the final stages of reaching an agreement with the World Bank to get the global lending agency back on board to fund the Padma bridge project.

He also expressed his hope to make a success of the efforts in this regard within a week.

Speaking with bdnews24.com on Saturday at his Minto Road residence in the capital, Muhith said, “All obstacles to reach the agreement are being cleared. I hope the matter will be resolved within one week.”

The Washington-based lender cancelled its promised loan of $1.2 billion for the country’s biggest-ever infrastructure project in June alleging corruption. Although the government later decided to bridge Padma river with its own resources, the Finance Minister has also been trying to bring back the global lender to fund the infrastructure project.

The global lender had spelt out a number of conditions for the government to fulfil after raising the allegations and suspended the fund for the project in September last year after Canadian authorities launched an investigation into SNC-Lavalin, a firm short-listed as a consultant for the project.

The World Bank cancelled the loan on June 30 claiming that the government did not follow their recommendations.

After the deal was scrapped, Information Communications and Technology Minister Syed Abul Hossain, who was the Communication Minister when the allegations were raised, resigned and former Bridges Secretary Mosharraf Hossain was sent on leave.

Meanwhile, several newspapers reported on Saturday that Integrity Advisor of the Padma bridge project and advisor to the Prime Minister Moshiur Rahman was also excusing himself from the project.

Muhith, however, said, “We will call tenders in November if the World Bank returns to the project, and the bridge construction work will begin by April next year.”

The Asian Development Bank (ADB) and the Japan International Cooperation Agency (JICA) extended their agreement to fund the project until Aug 31 even after the World Bank cancelled its funding. Bangladesh needs to come to an understanding with the global lender before that.

Muhith said the government did not want to delay any more in inviting tenders once both parties reached an agreement. “We have also received positive response from them (World Bank) in this regard.”

Asked whether a letter would be sent to World Bank to review its decision, he said, “I already have the draft letter. It will be sent after we get a positive response from the other side.”

On Aug 22, he had said, “We will issue the letter when we are sure that our proposal will not be turned down.”

According to the minister, the World Bank’s India-Bangladesh-Nepal’s Executive Director MN Prasad (former Indian Chief Secretary) had taken up the case of Bangladesh with the World Bank.

He also said Bangladesh’s Alternative Director to World Bank Mohammad Tareque was also joining the dialogue.

Of the proposed $2.9-billion project, the World Bank had agreed to provide $1.2 billion while ADB pledged $610 million. The Jeddah-based Islamic Development Bank is also to provide $140 million and JICA said it would contribute $400 million to the project.

Before the Eid holidays, Muhith had commented that the allegation the World Bank had raised was tarnishing Bangladesh’s image in the international arena. “We have to recover it (the image). It would be easier to recover it if the World Bank finances (the project).”

After diplomatic tug-of-war for months, finally the World Bank has decided to finance proposed Padma Bridge project in Bangladesh. Our Washington correspondent said, the decision of the World Bank has already been conveyed to other donors such as Asian Development Bank, JAICA and others. World Bank will make a formal announcement in this regard within couple of hours. A source inside World Bank told the Weekly Blitz correspondent that, the decision to finance Padma Bridge project was tabled for discussion from first hour on Thursday and the management of the bank finally agreed to “move ahead” with their investment in the project. It may be mentioned here that, on June 29^th, World Bank cancelled the loan offer of 1.2 billion dollars due to serious allegations of corruption. Meanwhile, Royal Canadian Mounted Police, Federal Bureau of Investigation and other investigation agencies in Canada and USA are already investigating the issues related to corruption centering the pre-tender activities of the construction of the project.

It is indicated by World Bank authorities that the construction of the project will begin in January 2013.

Meanwhile, though the latest news of World Bank’s agreeing to finance the Padma Bridge project would generate juvenile situation within the current government in Bangladesh, reports related to high-profile corruption centering the Padma Bridge project is expected to be published by the Royal Canadian Mounted Police as well as other investigation agencies by the end of October through international media. A team of Royal Canadian Mounted Police already visited Bangladesh and handed over their findings and evidences centering corruption in Padma Bridge project to the Anti Corruption Commission.

Meanwhile, two former executives with SNC-Lavalin will be back in court next year to face a corruption charge related to the Padma bridge project, reports The Canadian Press.

Ramesh Shah [61], of Oakville and Mohammad Ismail, 48, of Mississauga are accused of trying to bribe officials in Bangladesh. Ramesh had been a vice-president and Ismail was director of international projects at SNC-Lavalin in Toronto.

The prosecution alleges they offered payment to secure contracts for the supervision and construction of the Padma Bridge and an elevated expressway in Dhaka. No money actually changed hands but the accused are alleged to have violated the Canadian Corruption of Foreign Officials Act.

The preliminary hearing was set for April 8-19, 2013.

SNC-Lavalin had submitted its bid to act as the owner’s engineer for the Bangladesh government to supervise the contractor responsible for Padma Bridge construction.

Following allegations of irregularities in the construction of the Padma Bridge project, the World Bank last September suspended its US$ 1.2 billion fund for the bridge and launched an investigation on the projects bidding process.

This year, the World Bank temporarily barred a unit of SNC-Lavalin from bidding in new World Bank projects following an investigation into the Padma Bridge project.

Following a WB request, the RCMP launched an investigation against the Canadian company last October. It raided its office, seized documents from there and arrested former chief executive Pierre Duhaime, Bangladeshi-born Canadian citizen Ismail Hossain and Indian-born Canadian citizen Ramesh.

They claimed that they had gleaned information from the detainees and found proof of various irregularities regarding the consultant’s appointment for the bridge project.

They also claimed that the Canadian company SNC-Lavalin had offered several influential Bangladeshis, including former communications minister Syed Abul Hossain, fat bribes to obtain the consultant’s job in the bridge project.

The five others, whose names came up in the RCMP investigation, are: Abul Hasan Chowdhury, ex-state minister for foreign affairs, Mosharraf Hossain Bhuiyan, ex-secretary of the Bridges Division of the communications ministry, Rafiqul Islam ex-director of Padma Multipurpose Bridge project, Mujibur Rahman Chowdhury alias Nixon Chowdhury, civil contractor and younger brother of parliament whip Noor-E-Alam Chowdhury, and Ziaul Huq, managing director of Engineering and Planning Consultant Ltd [CEP], who represented SNC-Lavalin in the Padma bridge tender, said ACC sources.

Like RCMP, the ACC also launched an investigation in February this year. They also sought information from the WB and the RCMP.