The World Bank (WB) has cancelled an amount of US$1,016,784 (1.02 million) from the funds it provided to three projects in Bangladesh alleging violation of the procurement norms, reports UNB.
The multilateral donor agency also has asked the government to refund the money and take appropriate action against the officials concerned.
The investigations found evidence of "inappropriate" and "collusive" bidding practices, the WB said in an announcement Monday.
It also has appraised the authorities concerned of the projects -- Municipal Services Project (MSP), Health and Population Programme Project (HPPP) and National Nutrition Programme (NNP).
Four separate letters were also given to the Economic Relations Division (ERD) secretary on November 2.
The bank in the statement explained collusive practices as a scheme or arrangement between two or more bidders, with or without the knowledge of the procuring agency, designed to establish bid prices at artificial level.
It also described "a non-competitive practice in which bidders submit bids in complicity with each other to gain an unfair advantage."
On the MSP and HPPP, the WB concluded that collusion had taken place among bidders in 12 contracts valued $711,620 (equivalent to Tk 4.80 crore or 48 million).
"These findings were based on an independent procurement review conducted by the international audit firm, SGS (Netherlands) which examined a sample of contracts financed in these two projects," said the statement.
It said the WB determined that its procurement guidelines had been clearly violated in eight work contracts for MSP and three work contracts for HPPP, implemented by the Local Government Engineering Department (LGED).
Also, the procurement guidelines were allegedly breached in a ninth MSP contract, implemented by Panchagarh Pourashava through Bangladesh Municipal Development Fund (BMDF).
A review of the bid-evaluation report also showed that bidders quoted identical unit prices for most items of work, and that most bids submitted had identical handwriting, despite having been submitted by different bidders.
About NNP, the bank, in agreement with the government's audit observations, came to the conclusion that a non-competitive bidding process was followed in three contracts under the NNP valued $305,164 (Tk 20.40 million).
For instance, it said, a contract to procure computers and accessories was awarded to suppliers found by the investigators not in existence as an actual business.
The statement also added that two contracts to procure de-worming tablets were improperly advertised and "fraudulent" evidence was provided that bid notices had been published in newspapers of general circulation when in actuality the newspapers had not included the bid notices in their general-circulation editions.
The agreed procurement guidelines require publication of all bid notices in national dailies of wide circulation and open competition among all bidders under National Competitive Bidding (NCB).
"The above concerns in connection with MSP, HPPP and NNP were conveyed by the WB to the secretary of ERD, in four separate letters dated November 2, 2005," said the WB.
It reminds that World Bank's Country Assistance Strategy (CAS) puts governance at centre stage, and would attempt through its various instruments and in collaboration with the development partners to strengthen key institutions that are responsible for ensuring good governance.