World Bank withdraws funding to road project over laxity

After writing to the government on several occasions over laxity in implementing World Bank-funded road projects...

Written by Gunjan Pradhan Sinha | New Delhi | Published: February 19, 2009 1:54 am

After writing to the government on several occasions over laxity in implementing World Bank-funded road projects,the apex multi-lateral institution is learnt to have withdrawn its funding for the Muzaffarpur-Lucknow project. The National Highways Authority of India (NHAI) has stepped into action and terminated the contract of the defaulters calling them non-performers.

“The bank had raised concerns with us few months ago and the finance ministry had taken up the issue at appropriate levels in the government. The loan sanction for the projects has now been suspended,” a senior government official told The Indian Express. The non-performers include Progressive Constructions and construction major Madhucon Projects.

The 485 km stretch from Lucknow to Muzaffarpur on NH-28,was being four-laned with the assistance of $620 million from the World Bank. The loan was approved in November 2005 with a closure date of June 2010. The development work is divided into 12 packages (8 in the State of UP and 4 in Bihar) starting WB-1 from Lucknow to WB-12 at Muzaffarpur in Bihar. The work of 5 packages,ie Package WB-5,9,10,11 & 12 was very slow and a show cause notice was issued to the contracting agencies by the NHAI.

“The contract of Progressive Constructions was cancelled after we found no merit in the reply presented to us by the company over the lack of progress of work on the stretch,” a senior government official said. However,with this decision coming through the fate of the project is yet to be determined.

Then finance minister P Chidambaram had also written to roads and highways minister TR Baalu stating that the poor implementation of the World Bank-funded Lucknow-Muzaffarpur national highway had created reputation problems for India with respect to the Bank. The ministry of road transport and highways (MoRTH) had in turn asked the NHAI to look into the matter and take action.

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