Padma Bridge and the role of the World Bank

I say shame, shame. The World Bank has become a big bully. Posing as the proponent of good governance it has acted on the Padma Bridge in ways that demand apology, compensation, and improved procedures

One of the very unhappy incidents of the past few years has been the interaction between the World Bank and the Bangladesh Government over the Padma Bridge project. After years of preparatory work with ADB and the Japanese Government, the Bank made a decision to drop out of the funding based on alleged corruption in procurement of engineering services. But the actual reason had little to do with corruption, rather it was to advance the personal agenda of a very high Bank official.
An attempt to recover from this cancellation failed due to the stubborn, arrogant position of a review committee led by a man with little knowledge of Bangladesh. Actually the facts are readily available but no one has been prepared to publish these. Indeed the press in Bangladesh has sometimes seemed to side with the World Bank, determined to find the people involved guilty without any serious analysis.
I have waited for months to see if there was going to be any justice here, but I am sad to find that the only person who has stood on principle is the Prime Minister. The undertone of comment that she is protecting Syed Abul Hossain, an important AL politician, is upside down. There is no evidence he did wrong and by rejecting the demand of the World Bank that he be charged with corruption the Prime Minister took a lot of criticism for doing the right thing. The attack on the Minister was an example of the Bangladeshi poison pen at work.
The outcome is partly seen in two subsequent events involving the Bank. First, there is an ongoing trial in Canada of several persons who are accused of planning to corrupt Bangladesh officials including the Minister of Communication, the Secretary of the Bangladesh Bridge Authority and the Prime Minister’s Economic Adviser. At this trial the World Bank has refused to make available some information on its accusations, arguing it is immune to actions of Canadian courts. Apparently the Bank can make any accusation it wants against a person but does not have to answer for this. It completely undermines any accountability by the Bank.
The second thing that the Bank has done is to use its power to try to destroy the business interests of Syed Abul Hossain. It is a remarkable abuse of power. The Executive Director who represents Bangladesh at the World Bank should make a major issue of this behavior. The Bank officers who decided to take such a vindictive path of action should be punished. Any financial harm to the Bangladesh company should be compensated by the Bank. The Government of Bangladesh should protect its citizens from abuse by international organizations.
I will review what really happened. To implement the Padma Bridge project a number of contracts were needed. In particular one of the first to be completed was the appointment of an engineering company to supervise the construction companies insuring that the design was correct and followed, checking that materials were of required quality, and providing the Government and the lenders confidence that the money was being spent as agreed in the project plans.
A number of engineering companies submitted bids that were evaluated on the basis of quality and price. A total score was established for each company combining the quality score and the price score according to more or less standard rules with very heavy weight given to the quality of the bid [i.e. experience of the company, quality of the staff to be assigned work plan etc.]
The Committee that did the evaluation was established by the Secretary of the Bangladesh Bridge Authority who believed it was necessary to have the best possible technical membership. He appointed the three most senior and experienced civil engineers in the country. All with distinguished academic and practical careers. These men are of great integrity and reputation. The World Bank had appointed a member on the committee and the Bridge Authority also had a member.
The top two ranked companies I call U for the first ranked position and I call C for the second ranked position. The difference in the scores was very very small. C here is the Canadian company that has been the center of the accusations of planning corruption. The committee’s rankings were sent to the World Bank for review. The World Bank technical staff that had been working with project had two comments:
One dealt with the cost proposal, i.e. what the engineering firms would charge for the work. The World Bank identified irregularities in U’s cost proposal. The Committee was asked to make corrections to make it comparable with C’s cost proposal. The second was to review the CVs of staff and see if these were legitimate. When the Committee took the actions that the Bank requested the ranking was reversed and C was now first and U second. It was the action of the Bank staff managing the project that led to the reversal of the rankings and put C in first place. The World Bank operations team approved the final ranking.
While all of this was going on a number of poison pen letters were flying around accusing company C of corruption involving the Minister and Government officials. The World Bank carried out some investigations and the part of the bank called the Integrity Vice Presidency determined that there had been corruption and recommended to the President that the contract not be cleared. The operations department on the contrary said that the contract was fine and it should go ahead.
The outgoing President of the World Bank faced with what choice to make decided to accept the poison pen corruption claim and stopped the approval of the contract and cancelled Bank participation in the project. The World Bank President was leaving to campaign for Mr. Romney in the US Presidential election and wanted to present himself as a tough guy who was going to stop corruption. Rumor is he hoped to be Secretary of State if Romney won.
Actually the Bank was embarrassed at what had been done as there was no real evidence for the accusation against the Bangladesh officials, nor for canceling the project. The case against the Canadian company rested on what they were trying to do to corrupt the selection process in their favor. It said nothing about whether there was actual corruption. To cover what had been done the Bank appointed a three person committee to investigate. This group essentially wanted something to justify the action of the Bank if the Bank’s participation was restored. The PM refused to give it to them.
Unable to save face the Bank decided to permanently pull out of the project to the dismay of the Japanese Government and the ADB. In the world of big UN organizations there is essentially no real accountability. How ironic when we are lectured constantly about good governance but then the teacher refuses to hold himself up to scrutiny.
The Bank is hiding behind its own lack of evidence and further more decided to punish the now resigned Minister by attacking his business. Despite the fact that they found no wrong doings the Bank forced cancellation of a legitimate contract being worked on by the Minister’s company. Vengeance? Hypocrisy?
I say shame, shame. The World Bank has become a big bully. Posing as the proponent of good governance it has acted on the Padma Bridge in ways that demand apology, compensation, and improved procedures. Perhaps we should stop swallowing every juciy story that comes in a poison pen letter. The Prime Minister comes through this as acting on moral principles.
The writer is an economist