World Bank and Indian Anti-corruption Group Trade Charges about Bidding Process

Documents released recently under Delhi’s freedom of information law raised a major public controversy over World Bank involvement in contract bidding and fueled a public debate over possible privatization of the Delhi water system. On July 28, Indian anti-corruption group Parivartan, citing internal documents it obtained through a freedom of information request, charged that World Bank officials had repeatedly overruled Indian civil servants in the selection of a contractor to plan a reform of Delhi’s water system.

The multi-million dollar contract was awarded to a Calcutta subsidiary of PricewaterhouseCoopers (PwC) in 2001, allegedly despite strong opposition from the Delhi Jal Board (DJB), who consistently ranked PwC lower than other corporations during three subsequent rounds of bidding. Publicly exhibiting the documents, Arvind Kejriwal of Parivartan stated, “Despite reservations DJB cancelled the earlier evaluation and invited fresh bids. A new evaluation committee was formed to go through the financial and technical evaluation. The PwC again failed to clear the evaluation test. WB asked for detailed scores given by each member of the evaluation committee and subsequently demanded that the scores given by one of the member, RK Jain be omitted as he had given low marks to PWC.” Indian activist Aruna Roy called the Bank’s project mismanaged and unethical, and stated: “Water is an essential commodity and it is something linked to the right to life that needs to be maintained and run by the government and not private companies.”

Parivartan also called attention more generally to the importance of transparency and open decision-making in international organizations like the World Bank: “If the World Bank claims that such disclosure is not allowed under its current policies, we also demand that in the interests of being a ‘transparent public institution,’ it should change its global disclosure policies to enable public access to such information by the citizens of any of the countries concerned. The records of the Delhi Jal Board and their correspondence with the Bank indicate that the only way people can understand the reasons for certain crucial decisions taken is through access to the relevant correspondence,” said Kejriwal.

Michael Carter, World Bank Country Director, India, responded to Parivartan’s accusations in a press statement on July 29 and defended the Bank’s intervention in the contract bidding: “In order to ensure that the development outcomes for which its money is borrowed are achieved, the Bank has developed, with the concurrence of its members, a high set of standards in areas such as procurement, financial management, and environmental and social safeguards to which its borrowers commit. These are accepted as global benchmarks by its supporters and critics alike. . . . The insinuation that the Bank attempted to favor PWC is completely unfounded-on the contrary, this is an excellent example of the Bank’s close monitoring of the procurement process to ensure transparency and fair competition.”

In a subsequent letter to World Bank President Paul Wolfowitz, Parivartan challenged the Bank’s commitment to transparency and disclosure. The group also cited alleged suggestions from Bank officials that the Delhi project “was not the first time they were interfering in this manner” and had done so on several other projects. Under fire, the World Bank defended its selection criteria; one Bank official stated that “[t]here has been no firm favored or discriminated against in the Delhi scheme.” In a response letter to Parivartan, Mr. Carter charged that the allegations by the non-profit fail to consider the detailed explanation of the Bank’s procurement policy as well as rationale for the Bank’s close oversight of the project in this case, set forth in his July press release, and accuses Parivartan of “a gross distortion of the record” of the World Bank in Delhi and other similar development projects.

Under intense public criticism, the Delhi Jal Board decided not to go ahead with the recommendations of the World Bank report prepared by PricewaterhouseCoopers after Chief Minister Sheila Dikshit met with a group of NGO representatives and activist and National Advisory Council member Aruna Roy. Instead, Ms. Dikshit announced that she intended to open for public debate the issue of how to solve Delhi’s severe water problems: “We are not that stupid to accept all the recommendations of the World Bank. We are open to suggestions and other ways to deal with this serious situation in the Capital. If people and voluntary groups can do that, it is all the more welcome.” Aruna Roy stressed the importance of public participation in the sensitive matter of the water system: “There is an urgent need for people’s participation in such projects rather than opt for privatisation knowing very well that these multinational companies have failed miserably when implementing such projects in other countries.”

By Kristin Adair

Links

Parivartan website

Press Statement of July 29, 2005 by Michael Carter, World Bank Country Director, India

Parivartan letter to President Wolfowitz

Carter response letter to Parivartan

Price Waterhouse Coopers Report, Project Preparation Study (July 2004)

Delhi Right to Information Act (2001)

“‘DJB run by the World Bank,’” The Hindu, July 29, 2005

“World Bank rebuked over water deal,” by Randeep Ramesh, The Guardian, July 29, 2005

“World Bank rebuts Parivartan’s charges,” The Hindu, Aug. 26, 2005

“Sheila puts water scheme on hold,” Delhi Scoop, Aug. 28, 2005