A World Bank-funded, multi-million-dollar project intended to ease 30,000 demobilized soldiers into civilian life is officially scheduled to end this month. But a Bank official said last week that the project, which fell far short of its goal and was rife with scandal, ceased to function long ago.
“We don’t believe the government has any plans to continue working with the Bank on demobilization,” said Gillian Brown, the project’s task team leader.
Brown detailed the roles of several firms involved in a flawed contract that, she said, brought the $18.4 million project grinding to a standstill in June 2003. As far as she knows, there have been no steps to investigate the matter from the government’s side.
Aiming to provide compensation packages to soldiers demobilized from the nation’s over-staffed military, the project first ran into snags well before it halted. Allegations of pocketed donations slated for phony “ghost soldiers” surfaced in late 2002, an issue that led the government to deny access to military records on grounds of national security, Brown said.
Then, a year and a half ago—after only half of the 30,000 soldiers targeted for assistance had received their compensation packages—the Bank declared misprocurement on a contract to provide motorbikes to former soldiers. As a result, the government was required to repay $2.8 million of the $6.9 million contract, and the World Bank slashed its loan by $6.3 million. Meanwhile, progress on the project came to halt.
At that point, cooperation between the government and the World Bank was breaking down, Brown said, especially when it came to sorting out the project’s irregularities.
“Normally problems in procurement are first handed to the government and we would hope that they would investigate,” she said. “In this case, there was no follow-up by the government, and the Bank carried out their own investigation.”
Criticized by some observers for furtively dealing with the problem, the World Bank released the results of its investigation last month in a statement announcing the debarment of four companies and five individuals for fraud.
Two of the debarred companies, the French firm Thales Engineering and Consulting SA and Cambodian firm SPLJ Group, had been hired by the government to manage the financial aspects of the project, Brown said.
The other two, China-based Jiangmen Zhongyu Motor Group Co Ltd and Phnom Penh-based Cambodia Royal Auto Manufacturing Co Ltd, had been awarded contracts to provide the actual motorbikes.
Brown said Cambodia Royal Auto did not meet the bid requirements for its contract, and the other firms were penalized for “multiple misrepresentations of fact” when it came to the capacity of the Phnom Penh company.
The November statement made no mention of government involvement in the affair.
“The people who prepared the misleading information sent to the Bank were held accountable,” Brown said, adding that she hoped the case would serve as a lesson for future projects.
With its own investigation completed and the project due to close on Dec 31, the World Bank is now just sorting out lingering details.
The absence of a government investigation into fraud in its demobilization program comes in the context of similar irregularities detected in its distribution of rice to the poor.
The UN’s World Food Program announced in August that rice intended to assist needy families had been diverted and sold for profit. Since then, WFP has fired seven of its own staff and is now engaged in talks with the government while they try to establish what happened and who should be held accountable.
“Our negotiations with the government are continuing,” said Thomas Keusters, WFP’s country representative.
