The government has ordered a CBI inquiry into the charges of fraud and corruption in five health projects in the country supported by the World Bank. It has also blacklisted two companies.
The procurement scams were uncovered in the Detailed Implementation Review launched by the World Bank in 2006 and supported by the government of India. It examined projects on HIV/AIDS, malaria and tuberculosis. The Review’s final report was released by the World Bank and the Ministry of Finance on Friday.
“We were first informed about corrupt procurement practices in 2005 and have been working closely with World Bank to get the offenders. Last year, we took legal action against the two offending companies — Delhi-based Nestor Pharmaceuticals and Pure Pharma of Mumbai. The final order against Pure Pharma is out, but since there is a stay order in the Nestor case the ministry will take action as per the court order,” says Union health secretary Naresh Dayal.
“A CBI investigation is underway and the health ministry has transferred procurement to the UN Office for Project Services (UNOPS) last year. Some of the procurements under scanner are at the Central level, but the bulk is at the state level,” says Dayal.
The review was prompted when the World Bank found corrupt practices in a child health project in 2005. It was a cause for concern in late 2006 when former World Bank chief Paul Wolfowitz stopped funds until the health ministry took steps to fix procurement procedures of projects at the Central and state levels.
The World Bank is not considering stopping loans to health projects in India as of now, though it has tightened the review of its health projects in the country. “We will do our own investigation. We need to make procurement procedures at all levels foolproof. All projects, funded and otherwise, will now go through more stringent audits and performance reviews to ensure this does not happen again,” says Dayal.
“The government of India and the World Bank are committed to getting to the bottom of how these problems occurred,” said World Bank President Robert B. Zoellick in a statement. The World Bank will also use the Right to Information Act to track implementaion of its projects.