Fishy, fishy

World Bank tweaking contract

Our development partners have done a lot for Nepal’s infrastructure development. They have generously provided us grants and loans and with their assistance some of the big projects are also getting completed. Melamchi Project—financially assisted by the Asian Development Bank—is an example. But it is troubling to note that they do not always ensure transparency and fairness in the process of awarding the projects. Recent example is that of Mugling-Narayanghat road improvement project. Republica’s investigation has found that while the evaluation of proposals for building the road was in the final leg and Department of Road was waiting for final response from the World Bank, the financer of the project, to sign contract agreement and kick start works, the World Bank’s regional office for South Asia changed the course of tender process and terminated the tender. It has basically to do with disqualifying three lowest-bidding contractors from the bidding process. They argued that three contractors had missed to fill in one of the pages of the bidding document.

Such a ‘minor’ issue was traditionally overlooked in the past, according to Department of Road officials. The termination has cost us a lot. Nepal lost potential benefits of 30 percent below competitive bidding and also a time overrun of minimum one year due to re-tendering. This is proved by the fact that contract price quoted by the contractors chosen by World Bank was higher by about Rs 200 million on each of the three packages, making us incur a direct loss of Rs 600 million in a project of Rs 3 billion. As is the case, the World Bank has been influenced by some contractors in cahoots with some senior officials of road department to tweak the tender awarding process. This is objectionable and raises moral question on the part of the World Bank. Was it right to tweak the procedure that not only delayed the project by one year but also caused huge loss to the country? Even if some government officials had been involved in the process, should the World Bank—the global financial institution—have fallen under their influence? Investigation shows that similar contract of Road Sector Development Project funded by the same institution was signed just a week before this termination and the contractors had filled the tender forms in the same way. The World Bank has not offered satisfactory explanation for terminating the tender. This is another flip side on their part.

Mugling-Narayanghat road serves as Nepal’s artery. But delay in its completion has resulted in disruption of traffic along the road section a number of times in the past leading to rising cost of transporting goods. No doubt the officials complicit in this wrongdoing must be brought to book. But at the same time it is crucial for development partners like the World Bank to play by the rule of transparency and accountability. Not doing so would not only make a dent on their good reputation but also diminish their credibility. We sincerely hope that the international financial institution will offer clarification to the satisfaction of all.