Prime Minister Hun Sen on Friday called the World Bank’s demand that the government repay $2.8 million in misappropriated funds an “injustice” and said that. in the future, Cambodia would not work with the financial institution on military demobilization.
A World Bank-funded, $18.4 million project, intended to ease demobilized soldiers into civilian life ground to a halt in 2003 after the bank declared misprocurement on a government-awarded contract.
As part of the settlement, the government was required to repay $2.8 million in funds that were allegedly misused. It was reported this week that the World Bank sent letters to Hun Sen and Finance Minister Keat Chhon threatening to freeze all funding to Cambodia if the sum was not promptly returned.
“Regarding the payment to the World Bank, we agreed to pay it back, but this is an injustice,” Hun Sen said Friday. He explained that the government was only involved in the disbursement of compensation packages, while the World Bank was responsible for hiring the firms to implement the project.
The World Bank announced in November that four companies and five individuals involved in the project were subject to sanctions for fraud.
Keat Chhon said this week that the Finance Ministry had already deposited the $2.8 million in a World Bank account, but added that he was not sure who was at fault for the misappropriation.
“What we did was right but they saw us as careless,” he said Wednesday. “It is good that we and the World Bank are responsible enough to have a discussion and finish the project.”
And once this project is settled, Hun Sen said, there won’t be any more like it. The World Bank and the government have “agreed that a new company should be hired to make a financial report and clear up the problem,” he explained.
“About the future of the demobilization process in collaboration with the World Bank; we have finished this issue and will seek another source of funding,” he added.
(Additional reporting by Yun Samean)
