$3.6b World Bank schemes under scan

Posted by BankInfo on Fri, Mar 11 2011 06:01 am

The World Bank is going to review its US$3.6 billion lending schemes in Bangladesh next week amid concern that at least half of the 28 projects it is financing has failed to attain desired pace of implementation.

Officials said four of the projects have been singled out as "risky" and "problematic" and at least 11 others have "very high un-disbursed balances", raising fears the schemes may not achieve the desired results.

Finance ministry officials said the "implementation status" of all these projects and their bottlenecks will be discussed on Sunday when they meet representatives of World Bank Dhaka office in the planning commission.

"It's a crucial meeting. All the schemes being implemented with the World Bank's fund will be discussed there. They have raised some issues. We hope we can satisfy their queries," said an Economic Relations Division official.

The Washington-based bank is the country's largest donor. Annually it lends Dhaka $1.2 dollar in soft loans, which play a key role in Bangladesh's infrastructural, social, human and agriculture development.

The official said the World Bank would also review an "action plan", set jointly by the lender and the government in January to speed up the implementation of 28 projects, for which the lender has committed at least $3.6 billion.

According to the Bank, Bangladesh government's project executing agencies have been able to spend only $195.7 million loan during the first half (July-December) of the current financial year 2010-2011.

"We have identified the problematic and risky projects from the 28 ongoing schemes. These projects face slow disbursement of the funds and some other bottlenecks," a World Bank official in Dhaka office told the FE.

He spoke on condition of anonymity because he is not authorized to talk to the press.

The lender has identified avian influenza preparedness, water management improvement, disability and children at risk, and the enterprise growth and bank modernisation projects as "risky and problematic".

Besides, it has identified 11 others of the ongoing operational schemes, which have less than 50 per cent fund disbursement despite they have completed average two years project cycle since the loan agreements.

They include $350 million Siddhirganj peaking power plant, $149 million Dhaka water supply and sanitation, $184 million emergency cyclone recovery, $62.2 million clean and sustainable environment, $81 million higher education quality enhancement and $307 million investment promotion financing projects.

The Bank has said these projects face belated procurement and financial mismanagement, delay in setting implementation arrangements and complex government procedures.

A senior ERD official said since the government agencies have failed to implement the schemes in time, the Washington-based lender has cut back on the disbursement of the entire fund committed for the projects.

"The government agencies and the World Bank representatives will attend the next week's meeting. Our officials will explain the barriers in project execution as well as fund disbursement," he told the FE.

"I hope it will be fruitful meet and help us overcome the hurdles. Otherwise, some of these multi-million dollars schemes may face a bleak future," he added.

Source: The Financial Express, Bangladesh / March 11, 2011