ADB suspects graft in $27 mln Cambodian loans

01 Feb 2007 06:06:58
Source: Reuters

PHNOM PENH, Feb 1 (Reuters) - The Asian Development Bank (ADB) is investigating possible corruption in Cambodia's handling of $27.2 million of loans for rural development projects, its country director said on Thursday.

Arjun Goswami said ADB graft investigators were due in Phnom Penh in late March to chase allegations of rigged bidding for contracts that emerged after a joint bank and government audit last year.

"We are in the middle of the process and we should not jump to conclusions," he told Reuters, adding that the Cambodian government was aware of the probe.

The deals under scrutiny relate to loans granted to the impoverished southeast Asian nation from 2001 to 2006 for roads, sanitation and government training in three northern provinces, including Siem Reap, home to the famed Angkor temples.

Last year, the World Bank suspended $7.6 million in funding for three Cambodian development projects plagued by corruption and demanded misused funds be repaid.

International donors plough about $600 million into Cambodia each year, although the country remains one of Asia's poorest, with 30 percent of its 13 million people living on a dollar a day or less.

Cambodia ranked 131st out of 158 countries on Transparency International's 2005 corruption index.

Government spokesmen were not immediately available for comment.