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World Bank probes health projects, says it will tweak review procedure

World Bank probes health projects, says it will tweak review procedure
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First Published: Sat, Mar 15 2008. 01 03 AM IST
Updated: Sat, Mar 15 2008. 01 03 AM IST
The World Bank has started investigations into nine health projects the international aid agency sponsors in the country and said this could lead to barring firms and individuals from dealing with it. In a partial victory for the Indian government, meanwhile, the bank has agreed to modify its review process of various schemes and said it would give 30 days for governments to respond to its draft proposals.
The investigations follow a detailed implementation review (DIR) by the bank in January that had pointed out “serious indicators of fraud and corruption” in five projects for which it had provided $570 million, or Rs2,309 crore at today’s rates.
The ministry of health and family welfare, the administrative ministry for these projects, had taken strong objection to the report saying it was “one-sided” and had “wrong findings”. It also said the report had done “irreparable damages to the credibility” of the Indian programmes. Also, Naresh Dayal, secretary in the health ministry, told Mint a couple of days ago that the government was not given a chance to explain the findings.
The bank and the Indian government—after the Bank’s board of executive directors met on Thursday in Washington, DC, to discuss the DIR findings—agreed on joint action “to stamp out health project fraud and corruption”, said a bank statement.
The Central Bureau of Investigation will probe three projects in Chhattisgarh and Karnataka, and the government has promised that it will punish anyone found guilty, said the statement.
“We take these indicators of fraud and corruption extremely seriously. Working with the Indian authorities, we will take action against those found responsible,” said World Bank Group’s president, Robert B. Zoellick, adding that the lessons learnt here will be carried to their projects around the world.
The other elements of the scrutiny in the joint action include comprehensive procurement audits and performance reviews by independent third-party agents, strengthened procurement, financial management in the health ministry, increased use of community-monitoring, intensified supervision for civil works and measures to reduce collusion among bidders. The projects that had come under the scanner were for control of malaria, AIDS/HIV, tuberculosis, improving the quality and safety of food and drugs and a health programme in Orissa.
Increased scrutiny, feels Denis Broun, country coordinator for UNAIDS in India, is a natural outcome of the increased aid money.
“With more money coming into Asia than ever before, there are more sharks in the pool and that creates the need for more scrutiny and systems. All these years, we have been asking people to put in more money for these causes. Now that it is coming in, it is our responsibility to see that it is being spent efficiently and with integrity,” Broun had told Mint in an earlier interview.
The bank report has also made other aid partners edgy. Global Fund to fight AIDS, Tuberculosis and Malaria is planning to review its programmes in India where it has given out 13 grants worth $491 million, while both DFID (UK’s Department for International Development) and USAID (US Agency for International Development) are examining if any action is required in the light of these findings.
The health ministry, stung by the report on which it never got a chance to explain, had demanded that the World Bank acknowledge the “one-sided”, “faulty” findings and come out with a public statement admitting this. While the bank has stuck to its stance on instances of fraud, it took into account the Indian government’s “feedback and concerns about the DIR process”.
“The point has hit home that if the DIR had been discussed with us, they would have reached very different conclusions. Our view and corrective actions undertaken have been widely appreciated,” health secretary Dayal said. Though his expectation of a balanced outcome from the board meeting has only been “met to an extent”, Dayal said the bank had obliquely acknowledged the objections.
The agency will now tweak its DIR procedure to provide governments “30 days to comment on draft reviews before they are released” and will not publish the names of people or companies until the indicators of fraud and corruption have been confirmed.
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First Published: Sat, Mar 15 2008. 01 03 AM IST
More Topics: World Bank | Corruption | Health project | DIR | CBI |