World Bank halts USD 1.2 billion Bangladesh loan



Dhaka: The World Bank said on Monday that it had put on hold a USD 1.2 billion loan for a huge bridge in Bangladesh amid allegations of corruption in the bidding process.

The development lender committed the loan -- its biggest one-off credit line to any country -- in February to build the bridge over the Padma River, the local name for the Ganges.

The 6.15-kilometre (3.8-mile) bridge, designed to carry a highway and rail line, is expected to transform the country's isolated south.

The bank said it had suspended the loan following allegations of graft over the project, which is set to cost USD 2.9 billion in total.

"We will not proceed until we are fully satisfied on the fraud and corruption front," World Bank Bangladesh country director chief Ellen Goldstein said via email.

Bangladesh Finance Minister AMA Muhith said the government had ordered investigation in the graft charges.

He said the bank had "temporarily halted" funding after making "allegations that there could be corruption in the tender process".

The bridge, scheduled to go into service in 2014, would be the longest in the country. It was a key election promise of the Awami League government, led by Prime Minister Sheikh Hasina.

A study has found that the bridge could cut poverty significantly and boost GDP growth in the country's poor coastal region.

PTI