World Bank Resumes Funding of Suspect Projects

The World Bank announced Wednesday that it would resume funding for three development projects, with a combined value of more than $71 million, which it suspended last year following allegations of corruption.

Anti-corruption reforms now being enacted by the government mean the funds can safely be disbursed for the projects, the Bank said in a statement.

The funds were suspended after the Bank revealed in May that it had found evidence of systematic cor­ruption in seven projects. Three of the projects were ongoing at the time and had their funding suspended, while four had already finished.

The three projects to receive resumed funding are the Mini­stry of Land Management’s $28.83-million Land Management and Ad­ministration project; the $21.18-million provincial and rural infrastructure project administered by the Rural Development and Public Works Ministries; and $21.8 million provincial and peri-urban water and sanitation project run by the Mini­stry of Indu­stry.

In June, the Bank found that misprocurement amounting to $8.3 million had occurred in 30 contracts tendered under the three projects, a Bank spokesman said Wednesday.

“World Bank funds will not be used to finance these contracts,” he wrote in an e-mail.

The World Bank also announced in June that it would seek repayment of an undetermined amount of funds disbursed to 13 other contracts in the four completed projects where problems were also found.

The amount to be repaid is currently under discussion with the government, according to the World Bank spokesman.

Keo Rottanak, cabinet chief to In­du­stry Minister Suy Sem, said the World Bank made its decision to re­sume funding some time ago after Cam­bodia had met the Bank’s demands.

“We have accomplished what the World Bank has requested,” he said.

According to Wednesday’s statement, Cambodia is establishing “good governance frameworks” for all Bank-financed projects, including measures to strengthen contract tendering processes and regulate staff conduct.

A “key measure” is the delegation of “an independent international firm” in contract procurement, the Bank said.

Keo Rottanak said he could not recall the name of the international firm but that one has been chosen.

“We have met all the World Bank’s needs for a long time now,” he said. “It was very easy to meet the World Bank’s requirements because they are not new.”

Rural Development Ministry Secretary of State Ly Pros welcomed the news that the funds will be resumed.

“The suspension should be lifted,” he said. “We have been working very hard in order to avoid any pos­sible mistakes since the problems were raised by the World Bank.”

SRP lawmaker Yim Sovann also welcomed the Bank’s decision but lamented the fact that legal action has been brought against only one person in the multi-million-dollar, multi-ministry scandal.

“This is the culture of impunity. We struggle to eliminate it from Cam­bodian society,” Yim Sovann said.

“The government has to do more about corruption in the implementation of World Bank-funded projects,” he said.

Yin Wenga, a defense attorney for former Rural Development Ministry project manager Mour Kim­san, a Funcinpec official who was charged with embezzling $800,000, said his client remains free after being released on bail in De­cember. Charges against Mour Kimsan have not been dropped, he said.

CPP lawmaker Cheam Yeap said the Bank’s decision will help restore Cambodia’s good name.

“The new decision made by the World Bank today will recover Cambodia’s reputation,” he said, adding that only one person has faced legal action because the World Bank provided little evidence to substantiate its charges.


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