Be careful about corruption over the big projects

Finance Minister AMA Muhith has said the China Harbour Engineering Company Limited that got the contract for expansion of Dhaka-Sylhet Highway had bribed government officials. So, the government “blacklisted” the firm and decided to fund the expansion work of the 226km Dhaka-Sylhet road to a four-lane highway on its own, as per a report of local dailies.

‘The firm offered Tk 5 million in bribes to the Communication Secretary. The secretary informed us about the matter. That’s why we’ve blacklisted it. It won’t be able to work anymore,’ the Minister clarified the reason behind the action while briefing newsmen at the Secretariat on Tuesday.

Bangladesh and China signed a memorandum of understanding during the Chinese president’s visit to Bangladesh in 2016. Under the deal, China had promised to give soft loans of $21.5 billion for 26 projects, including the Dhaka-Sylhet four-lane highway project. The estimated Chinese finance was $1.6 billion for this project.

Earlier, the government on October 9, 2016, signed a primary deal with China Harbor. On September 21, 2016, the cabinet committee on economic affairs approved RHD’s proposal, allowing China Harbour to carry out the project. China also selected China Harbor Engineering Company Limited for Dhaka-Sylhet Highway project and asked Bangladesh to sign a commercial contract with the company. Negotiation process also started between the company and the Roads and Highways Department of Bangladesh, Finance Ministry sources said.

Why did it take the government over a year to find out that the company had paid bribes? Blacklisting the firm is fine if indeed it gave any bribes – but is there any guarantee that the next firm to do the project won’t give any to get it – especially as this is a billion dollar project? Any construction company would move heaven and earth to get the contract — who would ensure that they got the work in a transparent manner.

But some have accused Beijing of using mega project deals like the ones signed in Bangladesh to increase its regional political power. The case cited is the incident where Sri Lanka has formally handed over its southern port of Hambantota to China on a 99-year lease, which government critics have denounced as an erosion of the country’s sovereignty — noting the length of the lease agreed by Sri Lanka is the same as that which gave Britain control over Hong Kong in the 19th century. It was done because the port was running under heavy losses and Sri Lanka could not pay back its debt to China.

In recent months, however, there have been signs that China’s partners are starting to become wary over the terms being dictated to build projects under the One Road banner. Pakistan, Nepal and Myanmar have all recently cancelled or sidelined major hydroelectricity projects planned by Chinese companies. The projects would have been worth a total of $20bn. So Bangladesh too has to be careful to ensure that we are not saddled with a mountain of debt. But at the same time we must also ensure that the next firm who gets the contract does not do so in a corrupt manner.