DHAKA: A Japanese aid agency has withdrawn its offer to lend Bangladesh $430m to help build the country’s biggest bridge after the project was dogged by allegations of corruption.
The move came as Bangladesh withdrew its request for $1.2bn in World Bank financing for the Padma Bridge, months after the lender cancelled the loan due to claims of graft involving senior public officials.
Bangladesh had hoped to retain commitments by other lenders in its efforts to build the 6.2km bridge at a cost of $3bn, a major election pledge of Prime Minister Sheikh Hasina.
But in a further embarrassment to her government, key co-financier the Asian Development Bank told Dhaka on Friday it would not be able to lend the $615m it committed for the project. Late on Saturday the Japan International Cooperation Agency, an independent government aid organisation, became the latest lender to pull out.
“As a co-financier, we are unable to continue our commitment under the current framework,” it said in a statement.
“Our policy is to require the highest standard of ethics,” it said, adding that it hoped Bangladesh’s anti-graft body would “continue a full and fair investigation into the alleged corruption”.
After the pullouts the Saudi Arabia-based Islamic Development Bank is the only foreign donor to the project.
The World Bank cancelled its loan in June but Bangladesh had asked it to reconsider.
However, on January 23 Hasina said her government would construct the Padma bridge with funds from alternative sources unless the bank made a decision on financing by the end of that month.
Construction of the bridge in the southwest of the country was supposed to begin in the second half of 2010. Traffic currently crosses the Padma river — the local name for the Ganges — by slow ferries.
A World Bank study said the bridge could have a long-lasting impact on the impoverished southwest by improving transport links to the capital Dhaka.