Bangladesh is considering canceling a $1.2 billion World Bank loan for the construction of the Padma River bridge in favor of seeking alternative financing sources.
The loan, which was supposed to cover the bulk of the $1.9 billion project, is currently on hold. The World Bank delayed the release of the funds pending conclusion of a probe into allegations of corruption and fraud concerning the project.
An official of Bangladesh’s Economic Relations Department said there has been a “verbal decision” to seek cancellation of the World Bank loan but the move is pending approval from Prime Minister Sheikh Hasina, BDNews reports. The office’s Bridge Division has sent an explanation to the prime minister why the World Bank loan should be canceled before the government seeks financing from other sources such as Malaysia, the news agency adds.
There are some high-level government officials, however, who are against canceling the World Bank loan, BDNews says. These include a minister who argued that canceling the loan will negatively affect Bangladesh’s relations with the multilateral lender and seeking alternative financing could be very costly, the news agency notes.
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