India
World Bank has stalled funding for health project: Chidambaram
By IANS
Apr 25, 2006, 20:42

Finance Minister P. Chidambaram Monday admitted that the World Bank has stalled funds for the crucial second phase of Reproductive and Child Health (RCH) programme over allegations of corruption and said corrective measures would be taken.

"We are not happy with funds for RCH-II programme being put on hold. We have assured the World Bank that corrective measures would be taken to ensure the misuse of funds and corruption in procurement process is not repeated," Chidambaram said at a press conference here.

He said finance ministry officials are currently in Washington to resolve this issue even as the government is going ahead with the implementation of the Rs.400 billion project to reduce infant and maternal mortality.

India has the dubious distinction of having the largest infant and maternal mortality in the world despite efforts over the last several years to bring down the preventable deaths.

The World Bank decided to stall the funding for the RCH programme after receiving complaints that several malpractices had been noticed in the implementation of the first phase of the programme from 1998-2003.

"Several irregularities were observed in the procurement of medical supplies like bandages, with two agents being assigned the contracts for as much as 75 percent of the orders. The World Bank has sought a full probe to which the government has agreed," a senior finance ministry official told IANS.

"The health ministry has in fact found substance in the complaint and ordered an investigation by the Central Bureau of Investigation (CBI). In the meanwhile, we have conveyed to the World Bank that all measures would be put in place to ensure against any such corrupt practices," the official said.

At stake is not just the $350 million loan sought from the World Bank but also another $450 million from Britain's Department For International Development (DFID).

Under the RCH programme, the health ministry has been implementing various health care and vaccination programmes including the massive efforts for eradication of polio from the country.

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