PRESS RELEASE

World Bank Statement on Padma Bridge

June 29, 2012

WASHINGTON, June 29, 2012—The World Bank has credible evidence corroborated by a variety of sources which points to a high-level corruption conspiracy among Bangladeshi government officials, SNC Lavalin executives, and private individuals in connection with the Padma Multipurpose Bridge Project.

The World Bank provided evidence from two investigations to the Prime Minister, as well as the Minister of Finance and the Chairman of the Anti -Corruption Commission of Bangladesh (ACC) in September 2011 and April 2012. We urged the authorities of Bangladesh to investigate this matter fully and, where justified, prosecute those responsible for corruption.  We did so because we hoped the Government would give the matter the serious attention it warrants.

In Canada, where SNC Lavalin‘s headquarters are located, after executing numerous search warrants and a year-long investigation based on a referral from the World Bank, the Crown Prosecution Services brought corruption charges against two former SNC executives in connection with the Padma Bridge Project. Investigation and prosecution are ongoing but the court filings to date underscore the gravity of this case.

Because we recognize the importance of the bridge for the development of Bangladesh and the Region, we nonetheless proposed to proceed with an alternative, turnkey-style implementation approach to the project provided the Government took serious actions against the high level corruption we had unearthed. It would be irresponsible of the Bank not to press for action on these threats to good governance and development.

To be willing to go forward with the alternative turnkey-style approach, we sought the following actions: (i) place all public officials suspected of involvement in the corruption scheme on leave from Government employment until the investigation is completed; (ii) appoint a special inquiry team within the ACC to handle the investigation, and (iii) agree to provide full and adequate access to all investigative information to a panel appointed  by the World Bank comprised of internationally recognized experts so that the panel can give guidance to the lenders on the progress, adequacy, and fairness of the investigation.  We worked extensively with the Government and the ACC to ensure that all actions requested were fully aligned with Bangladeshi laws and procedures.

We proposed that when the first bids would be launched, the Bank and the co-financiers would decide to go ahead with project financing if they had determined, based on the Panel’s assessment, that a full and fair investigation was under way and progressing appropriately.

In an effort to go the extra mile, we sent a high-level team to Dhaka to fully explain the Bank’s position and receive the Government’s response.  The response has been unsatisfactory.

The World Bank cannot, should not, and will not turn a blind eye to evidence of corruption.  We have both an ethical obligation and a fiduciary responsibility to our shareholders and IDA donor countries.  It is our responsibility to make sure IDA resources are used for their intended purposes and that we only finance a project when we have adequate assurances that we can do so in a clean and transparent way.  In light of the inadequate response by the Government of Bangladesh, the World Bank has decided to cancel its $1.2 billion IDA credit in support of the Padma Multipurpose Bridge project, effective immediately. 

 

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PRESS RELEASE NO:
2012/545/EXT