The Padma Bridge project: A WB showpiece?

What had been in the offing since allegation of corruption in the bidding process for appointment of consultants for the Padma Bridge project was raised has now happened -- no more World Bank (WB) loan for the project. The main argument used by the finance minister (FM) in his letter of withdrawal to WB issued on January 31 is that in this last year of the government's tenure, they want to fulfill their commitment to voters, hence must start the construction of the Padma Bridge “immediately or as soon as feasible.” In his letter to ADB, JICA and IDB this “compelling timeframe” was mentioned as the key factor.
The more crucial impediment, however, as mentioned by the FM in both the letters, was the inability of the World Bank to de-link investigation from implementation, which according to him was agreed between the Bank and the government in September last year. This de-linking was due to take place “within one month after satisfactory start of the investigation.” We do not know if it was a written agreement or what exactly was meant by satisfactory start. But one can easily surmise that the investigation commenced by the Anti-Corruption Commission (ACC) at the behest of the government into allegation of corruption conspiracy has not been found to be satisfactory by the WB.
Just a day before the government's letter was issued the WB president declared that they would not finance the project unless “certain conditions were met to heighten oversight in the project” and assurance was given that a complete and fair criminal investigation was underway. In a speech made at the Centre for Strategic and International Studies in Washington DC the Bank president faithfully reflected the stance taken earlier by the Bank's international expert team.
The pertinent element here is the completeness of the investigation, by which the Bank has implied strongly enough that all names that appeared in the report of the inquiry team of the ACC be brought to justice under the relevant legal provisions. However, it has also been sufficiently clear that this was not an acceptable proposition for the government or the ACC, which has clearly aligned itself with the former.
In reality, therefore, what the Bank has been told is like “grapes are sour” -- we are not interested in something that we are not ready to pay the price for.
As suspected, WB has been followed by co-financiers ADB and JICA. It will be surprising if IDA also doesn't follow suit. The government has meanwhile reopened for obvious reasons its search for alternate options such as our own public money, Malaysia, China, India. Experts are debating pros and cons of various channels of national sources -- share market, bank loan, non-resident Bangladeshi sources, sovereign bonds, new taxation, surcharge, direct public donation, and possibly many more.
On the other hand, options of recalculating costs by more modest designs, such as discarding the rail bridge, were also being explored though, in his statement in the Parliament, the FM has emphasised on not changing the design. Parallel with these runs the debate on opportunities and risks of doing it ourselves, not least on the engineering front.
Ministers and government officials, faithful to the tradition already set for themselves on the matter, have been leaving no stone unturned to confuse the public by political oratory. Not only is there a lack of coordination and clarity on the way ahead, but also clear signs of deficit in political capital and acumen. Some have claimed that the contracting out would be completed within a few weeks, others that construction would start before the end of the government's tenure, still others committed that at least a few poles will be laid.
Be that as it may, the debate is most likely to continue, while the degree of its intensity will depend on how other big issues in our political landscape compete with it. However, whatever damage control measures are attempted, the question will remain whether exclusion of one or more high profile individuals from the corruption conspiracy case has been considered more important than the fate of the Padma Bridge or even the credibility of the government itself a few months before the election.
Whether or not this government or any other in the future builds a Padma Bridge, and irrespective of the source of funding for it if and when construction takes place, the question will remain whether the grand alliance government that had selected anti-corruption as one of its top election pledges could have saved itself the self-defeating embarrassment. It has always been in the government's own hands to face the challenge with dignity provided it could have risen above the denial syndrome and facilitated a fully independent and credible investigation.
It is not clear why subjecting anyone to the due process is deemed to be confession or proof of guilt, unless the opportunity cost is so high that the government's own image and national interest could be exposed to jeopardy. For what has now happened, one wonders if in assessing the opportunity cost implications of possible fallout of the outcome of investigations in the Canadian court has been taken into consideration.
On the other hand, WB has been handed a golden plate to showcase its “zero tolerance” against corruption in its global operation. It is not surprising that the WB president chose to cite their stance on Padma Bridge as an example of how they “stand firm” in case of “insufficient response by the authorities to the evidence of corruption.” That the government's response was insufficient is clear and self-defeating enough, as mentioned above. But interestingly enough, what remains an allegation of corruption conspiracy has already been conveniently packaged in the global lender's communication as “evidence of corruption.”
We wrote in these columns earlier that the primary responsibility for corruption in WB funded projects in Bangladesh, like in many other parts of the developing world, indeed lies with integrity deficits in governance in the host countries that often protect or facilitate a win-win collusion of politics, bureaucracy and business -- national and international -- as evident in cases like SNC Lavalin, Naiko, Siemens and so on.
It has also been sufficiently evidenced that the onus also rests significantly on the Bank itself, not least by the Bank's grudging confession of deficits in protecting its funds adequately and failures such as "material weakness." Referring to the “Cancer of Corruption” speech by one of his predecessors in 1996, the WB president rightly refers to new priorities in the Bank against the menace since then. However, the fact that, after over a decade of high-level speeches and rhetoric against corruption, the new-comer to the world of transparency and accountability has progressed very little to protect its projects and financial management from risk of fraud has been documented by the report of Independent Evaluation Group in 2009 sponsored by the Bank itself.
When a global multilateral institution like WB is alleged to have failed to “systematically and seriously address fraud and corruption risk,” it is understandable that it could be hyperactive in the name of taking “firm action.”
One of the lessons that the WB integrity vice president has taken out of the Padma experience is to find better ways to protect whistleblowers within the Bank staff. The above-mentioned report found that would-be whistleblowers fear risking their careers at the Bank if they report fraud. Even the Bank's integrity department staff was concerned that reporting corruption may lead to reprisals and that managerial signals are not consistent with the Bank's anti-corruption rhetoric.
It is no surprise that the Bank's showcasing of the Padma Bridge as a good practice example will conveniently ignore a convincing response to reported pressures created by the WB on the relevant authority to push a Chinese company, even though it not only lacked sufficient expertise but also produced fraudulent documents as evidence of relevant experience.
Be that as it may, we do welcome with anticipation that WB is making better efforts than it is known for with regard to corruption. The challenge for it is to demonstrate that its stance on Padma Bridge project does not become an instance of double standard motivated by factors other than what have been told so far, and that it can apply the same standards and principles in its business of lending globally elsewhere.
The writer is Executive Director of Transparency International Bangladesh.