For the second time in less than two years, the World Bank has alleged that rampant corruption — involving bribery to fraud, fake NGOs to tampered documents — has adversely affected five health-sector projects it funded, including control of AIDS, tuberculosis and malaria.

A Detailed Implementation Review (DIR), launched by the World Bank in 2006 and supported by the Government of India, has found “significant indicators of fraud and corruption” that include “collusive behaviour, bid-rigging, bribery and manipulative bid practices.”

The findings have shaken both the Government and the World Bank whose Board of Directors was presented with a copy of this report in Washington today. Since the 1990s, health accounts for 37 per cent of India’s new financial commitments to the Bank.

“This probe has revealed unacceptable indicators of fraud and corruption,” said World Bank Group President Robert B. Zoellick, in a statement today. “The Government of India and the World Bank are committed to getting to the bottom of how these problems occurred...On the Bank’s side, there were weaknesses in project design, supervision and evaluation. There are also systemic flaws. I am determined to fix these problems,” he said.

The report alleges serious discrepancies in project implementation, including deficient civil works certified as complete, broken or damaged equipment certified as compliant and under delivery of services. Also, it highlights that there were no audit and internal control systems.

What’s ringing alarm bells is the fact that this comes after a World Bank investigation in 2005 into a Reproductive and Child Health project found similar instances of corruption, including alleged kickbacks to Government officials.

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