World Bank has finally cancelled the $1.2 billion loan for the Padma Multipurpose Bridge project over allegations of corruption dealing a blow to the country’s biggest infrastructure project.
In a strongly-worded statement issued on Friday, the WB said it had ‘credible evidence’ of corruption involving Bangladesh government officials centring the project.
Former communications minister Syed Abul Hossain, former bridge division secretary Mosharraf Hossain Bhuiyan and officials of SNC Lavalin, a Canada-based construction firm bidding for the bridge’s supervision work, are on the WB’s list of corruption suspects.  
WB had kept release of the fund suspended for the last 10 months because of alleged corruption in the bidding process, requesting the government to investigate the matter and take punitive action against the suspects.
But the response of the Awami League government ‘has been unsatisfactory’ which led the bank to cancel its credit, said the WB, adding: ‘The World Bank cannot, should not, and will not turn a blind eye to evidence of corruption.’
The WB’s decision poured cold water on the government’s hope to start construction of the rail-cum-road bridge over the river Padma before the end of its tenure in January 2014. 
The government, frustrated by the delay in fund release by the WB, struck a memorandum of understanding with Malaysia for the PMB project, one of the major election pledges of the ruling party.
But many government insiders, including finance minister AMA Muhith, expressed doubt about the viability of Malaysia-based funding.      
Finance minister AMA Muhith, who had been engaged in negotiations with the WB in a bid to bring the project back on track in the last couple of months, issued a statement on Saturday afternoon rejecting the WB’s allegations.
He said, ‘The World Bank’s observation is unacceptable.’   
Communications minister Obaidul Quader in an instant reaction termed the WB decision unfortunate and mysterious.
Quader who was visiting Tangail with prime minister Sheikh Hasina pointed out that it was ‘mysterious’ because the WB had cancelled the loan although the allegation of corruption had not yet been proved.
‘The ACC is still investigating the matter,’ he added.
The prime minister’s economic affairs adviser Mashiur Rahman, also the integrity adviser to the bridge project, declined comments suggesting that the finance minister should speak on the issue.
In September 2011, the WB had brought allegation of corruption in the process for selection of a contractor for construction work of the main bridge and selection of a supervisor for the main bridge work.
After the government denied the allegations, the WB provided evidence in support of its allegations in last April.
In Canada, the Crown Prosecution Services brought corruption charges against two former SNC executives in connection with the Padma Bridge project. Investigation and prosecution are going on.
The WB in its statement said it had made an alternative proposal, a turnkey-style implementation approach to the project provided the government took serious actions against the high level corruption the bank said it had unearthed.
It sought actions by the government, including removal of all suspected public officials until the investigation was completed, appointment of a special inquiry team within the ACC and agreeing to provide information relating to investigation to a WB panel.
Other lending agencies like the Asian Development Bank confirmed $615 million loan, Japan $420 million and the Islamic Development Bank $140 million for the project. But they also suspended release of the funds after the WB had brought the allegations.
According to a study by JICA, the bridge would contribute an additional 1.2 per cent growth to the country’s gross development product and bring the less developed south and south-western regions into the county’s mainstream economic activities.