Bangladesh snubs World Bank

Bangladesh has told the World Bank it is formally withdrawing its bid for loans for co-financing the $2.9 billion Padma bridge project but will pursue inquiries into the supposed corruption, the Bank said in a statement.

"The Government of Bangladesh yesterday informed the World Bank that it is withdrawing its request of World Bank financing for the Padma Bridge," said the statement released on Friday.

Hours after the World Bank’s statement on the development, the Asian Development Bank said it would not co-financier the project following discontinuation of the main financier.

“The World Bank is the main financier of the Project and ADB a co-financier, alongside Japan International Cooperation Agency and Islamic Development Bank. Given this cofinancing arrangement, a discontinuation of funding by the World Bank means ADB is also unable to proceed with the transaction,” the ADB statement reads.

The Manila-based institution’s announcement belies the Bangladesh government’s hopes that it would make available the credit.

The World Bank had committed $1.2 billion in loans, the ADB $610 million, Jeddah-based IDB $140 million and the JICA $400 million with the rest coming from Bangladesh government.

Earlier, in a statement issued in less than 12 hours following the World Bank communiqué, the government said its schedule of project implementation did not match with the bank’s. “The project implementation as per the World Bank schedule is not certain,” it added.

“In order to realise its electoral pledge the Padma Bridge project will kick off without assistance from the bank,” it said.

The statement also read that Finance Minister AMA Muhith would address Parliament on Sunday over the project.

Asked by bdnews24.com on Friday morning, Muhith reiterated Dhaka’s decision and reaffirmed the Prime Minister’s statement that Bangladesh would go ahead with the biggest infrastructure project, if necessary, with its own resource.

"The letter to the World Bank confirms the authorities' intent to continue the investigation of alleged corruption related to the project,” the terse, two-paragraph statement from the Bank said.

“The World Bank has taken note of the Government's decision of not seeking renewed World Bank financing for the Padma Bridge, and it encourages the Anti-Corruption Commission to complete a full and fair investigation of the corruption allegations.”

Dhaka’s decision came after a year-long tussle with the Washington-based lender over suspected conspiracy to steal the project money, a significant part of which would come from the government’s own sources.

Muhith told bdnews24.com that the government had informed the other lenders as well of its decision not to seek the World Bank loan for the project.

“I had told the World Bank earlier, ‘let me know your decision [by January]’. But I didn’t get any response. So [we] wrote letters to the World Bank, ADB and JICA yesterday (Jan 31).”

“We have told the World Bank that we are withdrawing the request to review your decision. We do not need you any more to finance this project,” Muhith told bdnews24.com on Friday morning.

“At the same time, we have requested the ADB, IDB and JICA to stay with us. I am confident they will continue to support us on this project.”

Asked what would be the fate of the project now, the minister said: “The Prime Minister has already said that we will implement the project with our own resource if necessary. We’ll now quickly start working towards that end.”

“It will be easier for us if ADB, IDB and JICA continue to support us as they have been all along,” Muhith said.

“We will now move quickly. We had pledged in our election manifesto that we would bridge the mighty Padma. We will act accordingly.”

Muhith also expressed hope that the government’s decision to retract the fund request would not have any negative impact on the World Bank’s funding in other projects.

Officials say the government decided to continue pursuing the WB fund because of its low interest costs and kept other commercial borrowing options on hold.