The status of a highly-showcased $3-billion bridge and road program in Bangladesh, seen as an economic driver for the impoverished nation, remains unclear after the World Bank canceled a $1.2-billion credit, citing the government’s “inadequate response” to charges of corruption on the project.
Jim Yong Kim, the bank's new president, said on July 2 that the cancellation was "appropriate." The bank had been in talks with Bangladesh officials related to the alleged corruption since last September, he said.
In its June 29 announcement, the bank said it has “credible evidence” pointing to “a high-level corruption conspiracy” among officials of the Bangladeshi government, Montreal-based engineering firm SNC-Lavalin and others involving the Padma Multipurpose Bridge project.
The main element of the project is a $1.4-billion, 6.15-km-long bridge across the Padma River about 40 km southwest of Dhaka, the capital.
The World Bank said in its statement that it provided evidence to Bangladesh Prime Minister Sheikh Hasina, Finance Minister Abul Maal Abdul Muhith and Ghulam Rahman, chairman of the country’s Anti-Corruption Commission and urged them to investigate the charges and prosecute anyone found responsible for corruption.
A spokeswoman for SNC Lavalin says two former company executives who were "related to alleged improper practices in the bidding process" by a subsidiary of the Montreal-based engineer were arrested last year. She says the contract, "which was never awarded, was to act as the Owner's Engineer for the Bangladesh government by supervising the contractor responsible for the overall bridge construction."
According to the spokeswoman, "the World Bank reportedly postponed its financing of this project some time ago, not just the portion our subsidiary had bid on, which was actually quite small." She declined further comment, saying that Canadian authorities are still investigating.
According to published reports, Bangladesh officials have called the bank’s decision unacceptable and said the nation would find another way to finish the project.
A spokesman for AECOM, designer of the Padma bridge, says the firm's $16-million design contract was completed last November, and the firm no longer is involved in the project. That completion is a year later than originally projected. But the status of construction could not be determined.
Other financing for the project was to come from the Bangladesh government ($560 million); Asian Development Bank ($615 million); Japan International Cooperation ($400 million) and the Islamic Development Bank ($140 million).
The World Bank did not speculate on the status of those financing commitments.