The Hindu Business Line : Corruption in health projects funded by World Bank

Ever since the former World Bank President, Mr James D.Wolfensohn, decided to make corruption a plank of the Bank's policy framework and established the Department of Institutional Integrity (DII) to conduct regular implementation reviews of the various projects funded by the Bank in different countries, reports have been appearing in foreign media about many of the Bank's projects being mired in corruption.

There is even a view gaining ground that corruption is the inevitable price of doing good in the developing world!

Referring to a comprehensive review running to hundreds of pages undertaken by the DII at the end of 2007, The Wall Street Journal makes the stunning assertion that "With the exception of Paul Volcker's investigation of the UN Oil for Food scandal. no comparable review. has brought such damaging facts to light."

The review has brought to light grave malfeasance in the implementation of five health projects in India for which the Bank had given $569 million (Rs 2,500 crore) as loans. Here is a condensed version of the findings:

Food and Drug Capacity Building Project ($54 million): Questionable procurement practices, some of which indicate fraud and corruption, in contracts representing 87 per cent of the number of pieces and 88 per cent of the total value of equipment procured, defrauding nearly $9 of every $10 in aid funds.

Second National AIDS Control Project ($194 million): Some of the test kits supplied by particular companies often performed poorly, producing erroneous or invalid results, and potentially resulting in the further spread of disease.

The Bank itself comes in for criticism for paying scant attention to the performance and quality of the goods supplied to the blood banks and testing centres, and merely focusing on the number of such facilities created.

Malaria Control Project ($114 million): Numerous indicators of poor product quality in the bed nets supplied by the firms.

Tuberculosis Control Project ($125 million): Bidders were found sharing the same address and telephone numbers, unit prices showing a common formula, and indicators of intent to split contract awards among several bidders.

Orissa Health Systems Development Project ($82 million): In respect of 55 hospitals within its purview, the review found uninitiated and uncompleted work, severely leaking roofs, crumbling ceilings, mouldy walls, and non-functional water, sewage, and/or electrical systems, neo-natal equipment lacking adequate electrical grounding, potentially exposing babies and their medical staff to electrical shocks.

And yet, construction management consultants who supervised the work had given completion certificates to 38 of these hospitals.

India has protested to the Bank that the findings were `one-sided' and `unfair', and had done `irreparable damage' to the credibility of its health programmes. Unsurprisingly, the Bank's review has reportedly caused a scare among other donors.

The Global Fund to Fight AIDS, Tuberculosis and Malaria is one of them, with 13 grants totalling $491 million. The Bank, however, insists that "...even if all of the GoI's (Government of India) comments were accepted, there are still serious indicators of both fraud and corruption in the health sector in India." and wants India to increase transparency through Web publication of all procurement processes, bidding and contract awards, social audits, tighter scrutiny of non-government organisations and on procurement controls to catch collusive bidding.

Year after year, Transparency International and the World Bank Institute have been ranking India among the top 20 in corruption. The former's Global Corruption Parameter for 2007 singles out the political parties in India as the most corrupt entities, just a whisker ahead of the police.

Civil society too has been looking the other way without showing the spirit to put things right. What is all the talk of growth worth without good and honest governance?

B. S. RAGHAVAN

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