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.
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.
Following those findings, the Bank withheld funds worth nearly $2 billion meant for pending proposals in the health sector. When the report came to light in 2007, the Government responded by banning two drug companies, starting a CBI inquiry and streamlining procurement operations. Ironically, it was following this that the Government of India agreed to conduct a DIR into five other projects in the sector.
This DIR began in mid-2006 and involved over 75 Bank staff and consultants. Investigators and forensic accountants analysed 835 available international competitive bidding cases reviewed more than 1,400 bidding contracts. The World Bank calls these findings “red flags” and has urged India to conduct its own investigation.
Reacting to the report, Naresh Dayal, Secretary, Ministry of Health told The Indian Express: “The report has come today. We are setting up four groups to go into every aspect of it. We have already taken action following the first investigation into RCH. We are going to start civil, criminal prosecution proceedings wherever required following this too.”
... contd.
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