$1.29B in WB Loans for Five Projects Stalled Due to Consultant Delays

The Bangladesh Private Investment and Digital Entrepreneurship Project, launched in 2020 to support digital entrepreneurs in hi-tech parks and attract private investment in economic zones, secured $500 million in World Bank funding. However, with the loan tenure set to expire in December 2025, only $81.34 million has been disbursed, leaving a staggering $418.66 million (approximately 86%) undisbursed. The delays are primarily due to the slow recruitment of consultants, a key issue affecting several ongoing projects.

This is just one example among many flagged by the World Bank in its latest report. Out of five major projects, totaling $1.39 billion in committed funds, $1.29 billion remains stalled. These projects have disbursed between only 6% and 14% of their funds, highlighting significant bottlenecks in the procurement and execution processes.

Consultant Recruitment Challenges
Officials attribute the delays to inefficiencies in preparing tender documents, a lack of expertise in drafting terms of reference, and procurement complexities. Md Mamun-Al-Rashid, former secretary of the Planning Division, explained that project directors often fail to thoroughly review proposals, contributing to further delays. Additionally, World Bank's stringent procurement policies, when strictly adhered to, can also slow down the recruitment process.

Procurement Delays at the Heart of Slow Disbursements
Abdullah Al Mahmud Faruk, project director of the Digital Entrepreneurship Project, acknowledged that delays in the tender process have slowed down the project’s fund disbursement. He noted that large-scale tenders, which require detailed evaluations, add to the time taken to recruit consultants and execute contracts.

Undisbursed Funds Across Other Projects
The World Bank's active portfolio for 53 ongoing projects in Bangladesh stands at $15.99 billion, of which $9.59 billion remains undisbursed. A senior Economic Relations Division (ERD) official clarified that of the undisbursed amount, $2.89 billion is tied to loans expiring by December 2026, while loans maturing by December 2031 account for the remaining $9 billion.

The lengthy administrative process—including approval by the Executive Committee of the National Economic Council (ECNEC) and the signing of loan agreements—often extends the project timelines by 1 to 1.5 years. In some cases, the recruitment of consultants can take up to 2-3 years, significantly delaying the disbursement of funds.

Case Studies of Stalled Projects
A notable example is the Bangladesh Modern Food Storage Facilities Project, which, despite being approved in 2013, has only disbursed $339.3 million of its $412 million loan, leaving 18.8% of funds undisbursed after 11 years. Implemented by the Directorate General of Food, the project aims to build storage facilities in Chattogram, Narayanganj, and Ashuganj. Complications in the tender process have significantly hindered the project’s progress.

Another example is the Climate-Smart Agriculture and Water Management Project. Despite a $95 million World Bank commitment, only $8.9 million has been disbursed in the past 3.5 years, with 91% of the funds left unused. Project Director Khondoker Mohammad Rashed Eftekher cited delays in recruiting consultants for design and supervision, compounded by procedural complexities, as the primary causes for the slow fund disbursement.

Similarly, the Higher Education Acceleration and Transformation Project has faced significant delays, with 90.5% of its $191.27 million loan still undisbursed after four years. Project Director Professor Asaduzzaman explained that universities have been asked to submit proposals, and the procurement process will proceed once evaluations are complete by June.

The Bangladesh Road Safety Project, with a $358 million loan approved in March 2022, is another example. Despite project implementation beginning in 2023, a significant portion of the funds remains undisbursed due to delays in contractor selection, as noted by Project Director Md Amanullah.

The Way Forward
The slow disbursement of funds from World Bank loans poses a serious threat to the timely completion of critical development initiatives in Bangladesh. To overcome these challenges, stakeholders must address consultant recruitment bottlenecks, streamline procurement processes, and improve project planning and execution strategies. Timely execution of these projects is essential for driving sustainable economic growth and development.