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Indonesia told to return $5m after probe JAKARTA - The World Bank is asking the Indonesian government to return $4.7m (€3.7m) in loans for road projects after an internal investigation found that a contractor allegedly paid more than $300,000 in kickbacks to government officials. The graft allegations are the first to hit the World Bank’s projects in Indonesia since it asked for Jakarta to return $10m (€8m, £5m) related to a school textbook corruption scam in 2004.

They come just four months after Paul Wolfowitz, president of the bank, used a visit to Jakarta to unveil a new anti-corruption strategy, citing the bank’s present operations in Indonesia – a place where it has long faced allegations of enabling corruption – as a benchmark for how to avoid graft. But how the bank chose to disclose the most recent allegations also appears to raise questions about pledges for greater transparency.

On July 5 it quietly posted a notice in a remote corner of its website announcing it was seeking the return of $4.7m related to the $200m “Eastern Indonesia Regional Transport Project” begun in 2001 and preparations for the $287m “Strategic Roads Infrastructure Project”. The next day it issued a press release announcing that its board had approved $208m in financing for the infrastructure project.

But in that release it declined to mention the corruption allegations related to the project, although it said it planned to work with Indonesia’s government audit agency and anti-corruption commission to “further enhance transparency and accountability”. The allegations did not become public until The Jakarta Post on Saturday revealed the contents of a leaked letter to Indonesia’s finance minister, Sri Mulyani Indrawati, formally requesting the return of the $4.7m and outlining the results of an internal investigation.

According to the newspaper, the letter said the bank’s investigation had involved WSP International, a UK-based consulting firm. WSP could not immediately be reached for comment yesterday. According to its website, WSP International specialises in transport and infrastructure projects. Among its international projects, it lists a previous bank-funded road project, for which it was contracted between March 1997 and September 2002 to provide a “single window between government and the World Bank”.

According to a list published online by the UK’s Department for International Development, WSP International was shortlisted in June and July to tender for at least five DFID projects in places such as India, Sierra Leone and the Pitcairn Islands. The project in Sierra Leone was to offer “public financial management advice”. Prabha Chandran, a spokeswoman for the World Bank in Jakarta, yesterday declined to release a copy of the letter to the Indonesian finance minister, saying: “There are many things that we do with the government that we do not want to share with the public.”



Posted in General @ 14 August 2006 12:04 CET by Jeroen · 'Blog' RSS feed · permalink






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