After the Prime Minister taking to task the road transport and highways ministry for delay in projects, it has come to light that the finance ministry too had criticised its functioning.

Last month, the then finance minister P Chidambaram wrote a letter to roads and highways minister TR Baalu, which said that the poor implementation of the World Bank-funded Lucknow-Mujjafarpur national highway had created reputation problems for India with respect to the Bank. The letter was written when the finance ministry was seeking additional $3 billion from the multi-lateral agency to fund infrastructure projects in the country, primarily in roads and power sectors.

The letter states that on insistence of the economic affairs secretary, the bank has postponed the partial suspension of funding for the $614 million project. World Bank has extended a loan of $488 million towards the project investment. However, the bank may consider issuing a notification to the effect if work does not pick up on the project.

If the bank decides otherwise, it will prove to be a major embarrassment for the government which is trying to get additional funds for infrastructure. It may impact its prospects of getting a larger loan.

The project loan was made effective from December 2005 and is slated for completion on June 30, 2010. The World Bank has said poor contractor performance on some contract packages, poor safety measures and large variation from original estimate are key flaws in the implementation of the project.