WB halts Padma project funding

The World Bank has temporarily suspended its funding for the Padma bridge project following charges of corruption.

Finance minister Abul Maal Abdul Muhith informed journalists of the move on Monday, saying, "The government will investigate the allegations."

The World Bank has promised $1.2-billion financing for the country's longest bridge over the Padma River.

"The bank has levelled allegations of corruption during river dredging, appointment of consultants and preliminary selections. They have temporarily suspended the funding," Muhith said.

"The government will launch an enquiry into the whole thing. The Anticorruption Commission has already started looking into the matter."

"The government will issue a statement over the issue soon. I wanted to issue it today (Monday)…but can't," he added.

The minister also said the World Bank will continue with its assistance to other projects in Bangladesh.

"IMF (International Monetary Fund) will give us $1 billion extended credit facility."

Asked whether Nobel peace laureate Muhammad Yunus, who had been removed from Grameen Bank he founded following 'a dispute with the Sheikh Hasina government', influenced the World Bank to postpone the fund, Muhith said, "No, no such incident occurred."

A US-based Bengali news agency recently said that Yunus was lobbying for the postponement of the fund.

Construction of the $2.9-billion bridge over the river to connect the northwest of the country to the capital Dhaka and Chittagong port was expected to begin before the end of this year.

This is first time Bangladesh's prime development financier has suspended promised funds, a move officials say could raise alarm among other lenders.

Bangladesh topped the list of the world's most corrupt countries for five years until 2005, but the rating has slightly improved over the past few years.