If we started threads on corruption, I guess we could make several new posts everyday, and it would need to cover not just present BNP corruption, but past AL & Ershad corruption as well. I am making this post only because we had been discussing cricket boss Arafat Rahman elsewhere, and not as a political statement of any kind. I realize many people here are supporters of one party or another. That's OK, but let's not be naive about what goes on.
Why Bangladesh Spends Big on Projects it Can't Afford
OneWorld South Asia
14 August 2003
DHAKA, August 14 (OneWorld) - Bangladesh's undue haste in clearing an
exorbitant US $500-million magnetic levitation (maglev) train project
while its citizens go without bare necessities, has stirred up a
controversy, with auditors and economists hinting at corruption in
The 175-mile maglev line, which will link the capital Dhaka with the
port city of Chittagong, is typical of the government's lopsided
priorities. Observers allege the maglev train - a high-tech luxury
that doesn't exist even in rich countries - is being pushed through
by its political patrons.
In fact, the Public Expenditure Review Commission (Perc) earlier this
week, wanted to submit a report to Finance Minister M. Saifur Rahman,
stating that the project was unnecessary.
But Rahman refused to accept the report, saying, "The issue is still
premature. There is no point in submitting a report on something that
has not materialized."
Rahman claims the project is still in its embryonic stage. "The
proposal on the magnetic train has not been discussed at any level in
the government," he maintains.
But Bangladesh Railway's additional director general, (marketing and
corporate affairs) Sazzadur Rahman nailed the lie Wednesday, "We have
sought requests for proposals from companies and have received their
offers. This is an ongoing project," he admitted.
Earlier too, on June 19, Communication Minister Nazmul Huda had
announced at a press conference that the country was considering a
maglev train on the Chittagong-Dhaka line.
"We are considering proposals from international vendors to handle
the dream project which will reduce the travel time between Dhaka and
Chittagong to less than an hour instead of the present five hours,"
The press conference was attended by Arafat Rahman, the younger son
of Bangladesh Prime Minister Khaleda Zia, the Communication
Minister's younger brother Badrul Huda and Alexander Wagner, the
chairman of the German company, InterGlobe Euro-Arab Group.
It isn't a coincidence that Rahman represents the InterGlobe Euro-
Arab group while Huda acts as an independent consultant.
The shortlisted companies include InterGlobe, American McAllen and
Associated Research Management, a consortium of local and Japanese
Wagner feels that the train meets Bangladesh's needs. "The train is
very economical as it consumes less energy and has low maintenance.
It can be completed within 18 months," he claims. His company is
currently undertaking a similar project in Shanghai.
Such claims are trashed by the Perc which is trying to halt the
project in its tracks. Chairman M. Hafizuddin Khan says, "There is no
such train system anywhere in the world right now. The lone 20-mile
maglev scheme in China has not started operation. It's way too high-
tech for Bangladesh in the first place."
"If installed, this would be the most costly and economically
nonviable transport system in Bangladesh," Hafizuddin believes.
The chairman refers to a PERC report submitted to the Finance
Minister back in December. The PERC writes, "This technology is not
used commercially anywhere in the world. Not even in Germany where it
has been developed."
"In such a context, using this technology in Bangladesh is very pre-
mature and technically nonviable. This will require huge investment,
leading to high train fares that the general public cannot afford,"
But the Communications Minister defends his pet project. He questions
the PERC's jurisdiction in the matter, remarking that, "I will
obviously bring it (maglev train) in the public interest."
Professor of economics and a trustee of Transparency International
(Bangladesh), Mozaffar Ahmed, believes it isn't a straight deal.
Says Mozaffar, "Why does the Communication Minister holds a press
conference along with the Prime Minister's son? We smell corruption
He says a project of such magnitude should not be introduced without
a detailed feasibility report. "If they must set up this train, the
entire infrastructure will have to be set up afresh. Currently, there
are buses, trains and air services on this route. Then how will this
scheme be profitable?" he asks.
But the maglev isn't the only white elephant whose bill the exchequer
will have to foot. The Perc identifies schemes in the railway sector
costing more than US $150 million that get high priority although few
economic or social benefits are likely to accrue from them.
In addition, two expensive fertilizer plants - that were shelved last
year after an Industry Ministry study revealed that fertilizer from
them would cost the country US $17 million more per year than the
import price - have just been cleared.
On the other hand, projects that will immensely benefit the rural
population are on the backburner.
A US $1.5 billion project to build roads at the village level
countrywide, which was sanctioned in 1994, has a mandate to finish by
June 2003. But with an annual spending of just US $15 million, the
project lags so far behind schedule that the PERC calculates it will
take another 76 years to be completed.
The PERC notes that in the education sector, 90 per cent of
government spending is focused on buildings, providing employment to
teachers and pay hikes. Little attention is paid to improve the
quality of education.
In the health sector, the government spent funds to build healthcare
units staffed by the lower tiers of the administration. As these
units ludicrously function sans physicians, they contribute little to
improve public health.
Such profligacy hasn't gone unnoticed. An audit report by Auditor
General Asif Ali placed before a parliamentary committee last month
shows that government spending is routinely siphoned away from the
The fact that the auditors objected to a US $48 billion total of
spending between 1972 and 2003 shows the level of corruption in
Transparency International (Bangladesh) reports that in 2001, the
nation incurred a loss of US $16 billion because of government
corruption. For Bangladesh it wasn't small beer - it wiped out 4.6
percent of the country's Gross Domestic Product.