Friday, September 07, 2007

World Bank report points at corruption

NEW DELHI: The World Bank’s internal anti-corruption unit has alleged widespread corruption, including “witness statements” that kickbacks were paid to Ministers and officials of the Union Health Ministry, in its multi-million-dollar projects to reduce maternal and infant mortality.

The report, prepared in late 2005, said that projects worth $2 billion were “beset with corruption or were at risk.” This had led to the bank suspending healthcare loans worth over $1 billion, as first reported by a website's newspaper - the suspension was lifted after strong lobbying by New Delhi which is the Bank’s largest borrower but the report remained under wraps.

Now obtained by a website's, the report is not only embarrassing for the government and the bank - whose procurement and anti-corruption policies are under cloud - it also raises questions over another key sponsor of the Reproductive and Child Health programme, the British Government, through its Department for International Development.

The report acquires significance since the bank is expected, in a fortnight, to submit a detailed review of key health-sector projects it has funded in India. The main findings of the report, submitted by the bank’s Department of Institutional Integrity (also known as INT) in late 2005:

* Among the projects where evidence of corruption was found: $165-million Malaria Control Project (now succeeded by a ‘Vector Borne Disease Control Project’); $90.7-million Orissa Health Systems Development Project, $110-million Uttar Pradesh Health Systems Development Project and the Tuberculosis Control Project.

* Routine kickbacks paid to government officials, including officials at the Ministry of Health and Family Welfare; “oral testimony” by witnesses of kickbacks to Ministers.

* PSUs appointed as procurement agencies, Kerala-based Hindustan Latex and HSCC Limited, sought bribes (three to 15 percent of contract value), sold competitors’ bid information, punished companies that were not corrupt and even routed companies’ bribes to ministry officials.

* Bidders colluded to win the majority of contracts among themselves at significantly above-market prices - for example, 62 percent more than market price was paid for Folic acid tablets.

* Procurement controls were evaded and performance certificates falsified.

* Quality of drugs were sub-standard and quantities less than required; syringes and hypodermics were sourced from unlicenced Chinese suppliers.

Link to the original story provided

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