World Bank Projects - Worse Than Nothing

Just imagine, if we threw enough money at the third world, we could solve poverty. So that is what they want us all to believe. Of course to get the money they need to take it away from those who already have some. Too bad that money does not solve the problem, at least not when those directing its use are the UN and the World Bank. That is a sure path to waste and fraud. The sad thing is, this money could have actually done some good, had it not been given to those institutions.

One case in point is that the World Bank has been funding the building of Hospitals in India. Sounds great right? Well unfortunately, Four new hospitals sit there unused:

In addition, four of the sites visited by the DIR were locked shut and unused, and an additional 12 sites had extensions or other portions that were locked shut and unused. The reasons for this non-use varied from incomplete work that was not handed over to the medical officer for use, to the local medical officer’s refusal to accept what he considered to be substandard work, to a lack of functional water and power, to insufficient numbers of hospital staff. But in all 16 of these cases, the locked and unused spaces were stocked with EIF and other medical supplies. - Pages 192 - 193, Civil Works

Not only are they wasting money in building poor quality hospitals and hospitals that can't be used at all, but they are also wasting money on supplies that hospitals in India currently can't use:

In its site visits, the DIR often found extra equipment lying unpacked in storage, sometimes in unsanitary conditions. For example, at PHL Meerut, 12 machines, collectively worth USD 70,549, remained packed and stored in conditions that were likely to lead to damage given the extreme humidity within the store room.

A senior analyst at PHL Bhubaneswar informed the DIR that the laboratory had received nine pieces of equipment, worth USD 15,493, for which the laboratory had no use. This equipment was also still packed in storage unused. - Page 109

And it gets worse:

In 25 hospitals, the DIR observed that EIF items procured under the OHSDP were provided in volumes that appeared much larger than the hospitals’ needs. This observation is consistent with the findings of earlier OHSDP reviews, including the Government of Orissa’s 2005 audit report, which noted procurement of EIF items in excess of project plans totaling INR 125.3 million (USD 2.8 million); and the 2006 Joint Survey of Status of Project Equipment, which noted oversupply of phototherapy units, executive chairs, and steel cupboards.306 It is possible that such oversupply resulted from poor needs estimation by ELMARC and the PMC. However, the volume and value of the oversupplied goods are so large that they suggest that ELMARC may have intentionally procured excess EIF, which is an indicator of fraud and corruption.

As a result of this oversupply, much of the procured EIF items observed by the DIR were in storage. For example, the DIR observed 22 sites in which furnishings— such as executive chairs, executive tables, floor-mounted grouting chairs, and stainless steel stools—were left in storage. Oversupply was not limited to furniture: in half the hospitals it visited, the DIR observed baby incubators unused or in storage. Further, at some hospitals the oversupply was so great that the staff stored excess EIF items in areas designated for patient treatment, thus directly impeding the project’s development goal of promoting the treatment of a higher number of patients. In AH Podagada and CHC-II Majhapada, excess executive chairs were stored in wards that otherwise would be used for patients, while inDHH Nabarangpur, two excess desks were stored in the operating theater. - Page 257

And very simply failing to complete the work:

The operating theater was locked and unused, and medical officials told the DIR that it had never been completed and handed over for their use. Renovations of other portions of the hospital also were never completed. - Page 224

The example above is somewhat insidious in that not only did they not get an operating room, but the 'addition' actually took space away from the hospital.

The diesel generator building had been constructed, but the OHSDP provided generator was uninstalled and unused, and some hospital wiring appeared unrepaired. - Page 224

Now just because you put a hospital somewhere doesn't mean you have solved the problem, because you need trained people to staff them. And when you give them advanced machinery, you need to train them how to use it. Of course the World Bank allocates funds for training as well. Too bad, much of that money was also wasted as the training was never delivered:

Similarly, at nine hospitals staff told the DIR that equipment was unused because the hospital lacked personnel qualified to utilize it in their work. The most prominent example was a lack of laboratory technicians to operate pH meters, spectrophotometers, and flame photometers, as well as a lack of technicians to operate electro-physiotherapy units and cystoscopes. Like the lack of equipment training, the Bank noted the disjunction between the state’s medical staff resources and equipment procurement levels in its project supervision reports, but the issue was never resolved. - Page 258

And wasted money on more inappropriate equipment forced on the recipients.

The DIR found that most of the -80° C Nuaire freezers were of limited use and would not have been requested had the end users been consulted, and that in one instance, both Nuaire’s -40° C and -80° C freezers were delivered prematurely before the end user was prepared to accept them.

According to the KGMU blood bank’s staff, the facility did not have the necessary space and blood component separation license when it received Nuaire freezers in June 2001. The hospital apparently repacked both freezers and did not use them until it obtained the license in 2005. By the time the equipment was put into use, the two-year warranty period had expired; thus, the cost of any repairs on the freezers would have been borne by the blood bank. The doctors at KGMU generally felt that NACO had “pushed” the equipment on the hospital.

Think that is bad, much of the equipment being supplied by contract also provided for additional service in the contract price:

Care BioMedicals Refused to Honor Maintenance Obligations. The DIR found that one supplier of -80° C freezers, Care BioMedicals, refused to honor its AMC obligations unless it was paid an additional sum. Specifically, the Rashtrotthana Parishad blood bank, which had received a -80° C freezer from Care BioMedicals, informed HLL in January 2007 that Care BioMedicals had asked for INR 5,000 before “submitting its proposal for AMC.”144 Clause 2.1 of the Notification of Award, however, provided for a four-year AMC schedule (after an initial two-year warranty period) at no cost to the end user.145 Because Rastrotthana’s request for service fell within this four-year period,146 Care BioMedical’s request for additional compensation was in direct violation of its contractual obligations. The DIR could not determine if HLL took any action against the company.

Disincentive to Honor AMC and Warranty Obligations. The DIR observed that the manner in which suppliers were paid may have created a disincentive for suppliers to honor their AMC and warranty obligations. The director of the KGMU Hospital in Lucknow explained that once the PSA made the 90 percent payment of the contract value to the supplier upon shipment, the supplier had little incentive to fulfill further obligations, including warranty and the AMC. - Pages 368-369

This firm was not the only one to ignore not only their standard warranties, but also the pre-paid extended service contracts.

Of course the suppliers know that the World Bank does not really care if they perform or not, so over time the violations from what is expected just gets worse. Take this supply of test kits that were one step away from being expired, not that they were any good to begin with:

Invalid, False Negative, and/or Discordant Results with Test Kits Supplied by Monozyme. In late 2006, the Indian media reported that Monozyme had been distributing expired diagnostic test kits in West Bengal, and had in some cases been substituting pregnancy test kits for HIV diagnostic test kits. Given that the MDACS awarded Monozyme two contracts for the supply of HIV rapid test kits under the NACP II, the DIR, in light of these media reports, reviewed the performance of the test kits supplied by Monozyme, which were received by 43 facilities in Mumbai.81 The DIR discovered that five VCTCs had complained to the MDACS that Monozyme-supplied SD Bioline HIV 1/2 Rapid test kits were producing invalid, false negative, and/or discordant results. - Page 350

This last extract sums up the whole World Bank effort. You need an HIV test kits and your given Pregnancy test kits. Now it might be a good idea to help fund projects in the third-world but it needs to be a third-world operation, not one thrust upon them from the first-world.

World Bank Department of Institutional Integrity (DIR)

World Bank Disgrace - WSJ
World Bank Purge - WSJ

World Bank Internal Fraud Investigation:
Detailed Implementation Review, India Health Sector - WORLD BANK REPORT

Detailed Implementation Review, India Health Sector - WORLD BANK REPORT - VOL 2


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