Friday, May 21, 2010

hello readers. to day i have a question for you people. As we all know our government has changed new set of people is running the country but, did any thing change in last 1 or 2 years?

Monday, January 11, 2010

Corruption ROADS AND HIGHWAYS DEPARTMENT

Corruption ROADS AND HIGHWAYS DEPARTMENT
Corruption in the Selection of New Roads
The identification and selection of new roads to be constructed should be based on cost-benefit analysis, considering the availability of financial resources. In practice, such analysis is rarely done except in the case of donor-funded projects. The task of identifying new road projects has traditionally been "delegated" to ministers, members of parliament, bureaucrats, and the influential local elite, for whom the construction of a road is an effective means of buying future votes. Thus, many of the road projects which are taken up have very little to do with national or regional priority and availability of financial resources. Yet, neither the Planning Commission nor any other relevant agency raises any question about the justification of such "mandatory" projects.
Until a road completed, the project sponsors will often invoke the support of a minister or even the prime minister to successfully lobby for additional financial allocations, causing even more wastage of scare developmental funds. Sometimes pressure is brought upon divisional RHD officers who, under the government's administrative and financial rules, are authorised to write cheques on the government account without any limit.
Because of the large numbers in the implementation schedule, projects are rarely completed in time. When a particular stretch of a road is ultimately built and opened to traffic, repairs become necessary before the full length of the road is completed. Development funds are usually diverted for such repair work, with little regard to proper maintenance of accounts for such expenditure.
Corruption in Road Construction
Widespread corruption is involved in determining the path a new feeder road should follow. It is quite common for affected landowners to bribe junior level RHD officials or use of their political connections to change the course of a road. As a result, a road that had a straight alignment as per the original plan ends up with numerous bends.
After the commencement of civil work, RHD officials receive kickbacks from the contractors either a direct payment (usually a percentage of the contract value) at different stages of the job, or as a share of the contractor's surplus arising from an over-billed or fictitious or substandard contract work which was knowingly approved by the RHD engineers in the first place.
A common example of the second type is the frequent re-carpeting of roads. The annual re-carpeting which takes place in Bangladesh would not be required had the work been done according to RHD's written specifications. By producing sub-standard work, the contractors and the collusive RHD officials jointly ensure the continuity of future corrupt earnings.
Earthwork is another source of rampant corruption. Embankments of 6 to 8 feet height are often required to protect the road from flooding during the rainy season. Private contractors will usually make the road measurements just before the onset of the rainy season (March to June) and carry out earthwork during the rainy season when parts of the earthwork are washed away, making it impossible to verify the extent of the work. It is common practice for contractors to bill for trucked-in earth which involves a higher cost, when in fact the earth is usually dug up from the depressed areas on either side of the road. The windfall gains resulting from such fraudulent activities are pocketed by the contractor, who shares a part of it with the RHD executive engineer who certified the work and cleared it for payment.
Corruption in Engineering Supply and Repair Contracts
In engineering supply contracts (e.g. spare parts for ferries), original or genuine parts are never supplied. The contractor, after paying bribes to the RHD hierarchy, has to make some profit for himself after all. There would be nothing left if he purchased a genuine or new part. Sometimes, the contractor will purchase an original part - one which has been stolen from RHD stores with the connivance of the store-keeper. For repair works, most contracts end up is false or fictitious works since there is no physical supply involved. In some cases, the contract itself is fictitious. If the work is to be done outside of Dhaka, chances are even greater that no actual work or supply will take place.
The rates of bribe paid to the different levels of RHD officials are well established and known to all relevant parties. Deviations from the standard rates are the prerogative of the higher level officials. The total bribes paid by a contractor ranges from 37% to 47% of the gross contract value. The effective rate between 40% to 52% of the net contract value, after deduction of VAT and advance income tax.
Selection of Local Contractors
Local contractors are usually selected through covert negotiation, although records would show that a competitive bidding system, as required by government rules, was followed. Prior to the submission of bids, a tacit understanding between the RHD officials and the contractor syndicate on the allocation of contracts amongst contractors and the contract prices. Competitors do not object to such an arrangement, and wait obediently for their turn in some other contract.
Outside experts are rarely used for determining the volume of material and labour input, or for preparing the design specifications. As a result, the quantity of work budgeted for is usually much higher than actual requirements. Besides, few projects can be completed within the stipulated period for want of adequate resources. For such delays, contractors are compensated by increasing rates and in other forms providing additional benefits.
Corruption in Consulting Activities
Consultants pay, on average, 12 to 15% of their fee as bribe at the time of commissing of the contract. The money is divided between ministry officials, and the members of RHD's Technical Evaluation Committee. Interestingly, the corruption level in the RHD is judged to be "moderate" compared to other government departments. The RHD rate is usually between 2 and 6% of the consultant's fees, whereas in other departments, the rate is not only higher (up to 15%) but is applied to the sum of consultant fees plus out-of-pocket expenses. RHD is by far the largest user of consultants and the recipients of bribes apparently abide by the dictum of "not killing the goose that lays the golden egg".
Causes of Corruption in the RHD
• Centralisation of decision-making powers relating to the selection of consultants and construction firms for big projects in the hands of ministry officials, who are less accountable and controllable in comparison to RHD officials.
• The selection of locally-funded feeder road projects is not based on economic cost-benefit analysis, but on the relative political clout of a vested external group, composed of ruling party leaders, politicians and local elite.
• Lower level RHD officers have too much discretion to change the alignment of rural and feeder roads.
• Outside experts are rarely used to independtly determining the volume of material and labour input, or for preparing the design specifications. As a result, the quantity of work budgeted for is usually much higher than actual requirements.
• Senior RHD officials have too much discretion in the setting of micro criteria to be used in the evaluation of consulating firms.
• The technical evaluation comiitttee's report is not required to be published within any stipulated time period.
Reasons Why Corruption Continues
Although RHD has elaborate rules for proceeding against corrupt official, these procedures are seldom invoked. In the few cases when departmental action has been initiated, the accused officer was either let off completely or subjected to minor punishment. The reason behind such blatant unconcern is easy to understand since corruption has taken firm hold at each level in the RHD official hierarchy, reportedly starting at the very top.
Very few cases have been referred to the Anti-Corruption Bureau, since most of the officers who would make such a decision are themselves the beneficieries of corruption. Moves to control corruption from RHD controlling ministry are not forthcoming reportedly for the same reason.
Suggested Remedial Measures
• In foreign-aided projects, the concerned donor agency and RHD should jointly set down the micro-criteria to be used for technical evaluation.
• During technical evaluation, at least one representative of the donor should sit in as an observer in the Technical Evaluation Committee, to ensure that evaluation does not suffer from undue delay.
• The Evaluation Committee should not take cognisance of anonymous complaints made to the minister or the secretary. This is used as a blocking tool when committee decisions do not appear to be going the way of the interested party.
• The criteria for shortlisting or prequalification of consultants and contractors should be made public before final decision is taken.
• An investigation of possible collusion between consultants and RHD / ministry could start with an analysis of the contract award history, relating the findings to close familial or known business links between the key decision-makers and the consultants.
• Local government bodies should be handed the authority to plan and implement all feeder and regional roads, along with the power to raise matching funds for financing these projects.
• The Chief Engineer of the RHD should be selected on the basis of merit, not seniority.
• The cheque issuing authority of RHD should be revoked except in situation in situations of disaster management.
• Rooting out corrupting from the RHD is a long-term proposition. Any workable solution must include steps to drastically down-size RHD's present scope of activity. The aim of such down-sizing would be to limit RHD's main function to regulatory and policy-making roles, with all line work to be carried out be consultants.


Corruption in CUSTOMS DEPARTMENT

Corruption in CUSTOMS DEPARTMENT

Corruption in the Assessment of Goods

Evasion of custom duty by a dishonest importer is the most common form of corrupt transaction in the customs department. In most cases this is done with the active connivance of customs officials, who allow the misdeclaration of value or quality or quantity of goods, smuggling or other commercial fraud.

The basic function of the customs involves the assessment of value and collection of duties and other taxes at the customs ports, airports, and land stations. The customs officers are the kingpin in the entire process. The present regulations pertaining to valuation provide a high degree of discretionary powers to the officers. Not surprisingly, an officer interprets and enforces the law in such a manner as suits his or her convenience.

The process of appraisement involves the examination of the imported goods to ascertain the correctness of the declaration made by the importer in the Bill of Entry. The procedure of 'first appraisement', where the goods are examined before making an assessment, is time consuming. The 'second appraisement' system, where assessment is made first and examination carried out later, is more convenient to the trade and conducive to the expeditious assessment and clearance of goods. However, the existing legal framework identifies the first appraisement as the standard method to follow, leaving the use of the optional second appraisement to the discretion of customs officers. To avoid delays, importers will often pay a bribe to ensure the use of the quicker method.

Corruption in the Detention of Goods During Assessment

The law requires customs officers to complete assessment and clearance "without undue delay". However, this phrase is not clearly defined and is open to subjective interpretation. In practice, delay is the order of the day. To avoid this, importers pay "speed money" as a matter of routine. If the customs officer causes due or undue delay in assessment, the goods remain virtually detained for a period which is decided by the officer and as a result the importer is bound to suffer financial loss.

Corruption in the Valuation of Goods

Valuation is a critical factor in the customs assessment procedure since duties on imported or exported goods are calculated in terms of a percentage of value (ad valorem). Until recently, the valuation method used was based on the concept of "normal price", which is the estimated price (in the opinion of the assessing officer) which the goods would fetch at an open market sale at the time of delivery. Valuation based on normal price is often arbitrary, fictitious and unfair.

The use of normal value has been the main bone of contention between the customs authority and the importers. However, the system can be mutually beneficial to corrupt officers and dishonest importers since it encourages under-invoicing of high tariff items. The loser is the government which receives a lower revenue as a result of the under-valuation. Corrupt officers can extract bribes by threatening to assess goods at a higher value on the basis of the recorded price in their possession.

In contrast, the "transaction value" system conforms closely to commercial realities and prohibits the use of arbitrary value. Under the terms of the WTO agreement, Bangladesh must eventually switch to this system, but exactly when it will do so no one knows. The use of transaction value is likely to reduce corrupt practices connected with valuation of imports.

The pre-shipment inspection (PSI) procedure for assessing imported goods has some merit in breaking the monopoly power of the customs department in matters of valuation, thereby reducing the scope for corruption. Such a system was introduced a few years ago for limited categories of import goods. But it was withdrawn because dishonest importers were able to get grossly under-valued certifications by unscrupulous PSI agents, who had no legal liability for the valuations they certified. A mandatory and hopefully legally sound PSI system based on the WTO agreement is expected to be implemented from early 2000. Three international PSI firms have already been selected using a competitive bidding procedure.

Corruption in Adjudication and Appeal Systems

Senior customs officers enjoy absolute discretion in deciding the fate of customs cases which are under investigation. Under such circumstances, they often abuse their powers of adjudication, and can very easily pass an order for confiscation of goods or imposition of penalty. Orders and decisions passed in adjudication are not supported by written reasons or documentary evidence. Thus, the doctrine of natural justice is not followed. The adjudication process can be lengthy as there is no legally provided time frame for deciding a case. This provides a scope for illegal gratification to expedite a case. After an order is passed, the actual issuance of the order can be subject to unusual delays. Here too incentives are required to get the order issued.

In 1995, the entire appellate jurisdiction of the National Board of Revenue was transferred to an Appellate Tribunal and the revisional power of the government was repealed. As a result, the tribunal's judgment in an appeal case is treated as final, unless the case is referred by the Tribunal to the High Court for determination of any question of law related to any order of the tribunal. There is, to date, no record of any application for reference to the High Court on any question of law. The finality of the Tribunal's order is effectively absolute, a situation which is bound to result in corrupt practice in the event of the Tribunal being constituted by persons of doubtful integrity. The Tribunal also handles cases relating to valuation or classification of assessment, even though it does not have jurisdiction over such matters. There are strong grounds to suspect ill motive behind such actions of the Tribunal.

Causes of Corruption in the Customs Department

  • Sweeping discretionary powers bestowed upon customs officials by the authority of the law allow endless opportunities to engage in corrupt transactions.
  • The absence of clearly established departmental guidelines governing recruitment, postings, transfers and promotions of officers, has resulted in a work-force of low ethical and moral standards and in an absence of institutional discipline.
  • An assessment system which uses a highly subjective valuation method to determine the amount of duties and taxes to be paid by importers provides the corrupt officer with the perfect tool to extract bribes with.
  • The absence of clear-cut time frame for completing the tasks of assessment and clearance encourages widespread bribery to expedite the customs procedure..
  • The adjudication and appeal procedures applicable to customs offences are characterised by high discretionary powers in the hands of the adjudicators and a departure from the norms of natural justice.
  • The presence of significant anomalies in the tariff structure provides incentives for evasion of revenue through methods of misdeclaration and underinvoicing of imported goods..

Why Does Corruption Continue in the Customs Department?

Corruption in the customs department takes place in such a subtle way in the regular performance of statutory functions by the customs officers that it becomes almost impossible to prove a charge of corruption against a particular officer. It is very difficult to gather the required evidence since usually only two or three persons are involved in the transaction. Given that accountability of officers is conspicuous by its absence, departmental anti-corruption measures are non-existent. The few, token efforts at tackling corruption have come from without, in the form of the Anti-Corruption Bureau (ACB).

However, the ACB, which is manned by enquiry officers who have little undertanding of the legal environment in the customs department, finds it very difficult to make any headway in corruption investigations against customs officer. Even if an officer is caught red-handed at the time of taking a bribe, the corruption charge does not get proved as such. The ACB investigator has to establish that the amount involved in the corruption offence constituted an "illegal gratfication", which is not very easy to do in practice. The mere exchange of money does not automatically mean that an offence has been committed. The ACB's impotency is reflected in the fact that not a single procesution has resulted in a successful conviction. There is thus no reason why corrupt customs officers should take the available anti-corruption measures very seriously.

Suggested Remedial Measures

  • The main thrust of corrective action should clearly target the reduction of the discretionary and monopoly powers vested in customs officers by appropriate changes in the legal and procedural system relating to assessment, appraisement, and detention of goods. At the same time, a departmental control system must be introduced to make officers accountable for any misuse of of power for gainful purposes.
  • New officers should be recruited through competitive examinations and put through planned training course. Subsequent promotions should be based on written or oral tests to determine efficiency and merit, with minimum dependence on annual confidential reports.
  • A transparent system should be introduced for keeping officers informed about their position and standing in matters of transfers and postings, promotion, and training abroad.
  • The incidence of "speed money" could be reduced by cutting down the redundant steps in a Bill of Entry's journey, without compromising the safeguards of revenue interest, and by setting down time limits for the completion of each stage of the assessment procedure.
  • When goods are detained, the detaining authority should follow a specified time schedule by which the detention and disposal procedure is completed. This is necessary to protect the rights of the importer, who must be informed of the fact of detention of his goods under a written order indicating the reasons for such detention.
  • There should be scope for making an appeal to the Appellate Division of the Supreme Court. The Appelate Tribunal should not meddle in matters of valuation and classification, which is best dealt by Commissioners as executive authority.
  • Tariff anomalies should be removed. This will not only reduce opportunities for corruption but in many cases will actually increase the government's revenue collection from import duties and taxes.

Corruption in BANKING SECTOR

Corruption in BANKING SECTOR

Genesis of Corruption
The legacy of corruption and malpractice in the banking sector can be traced back to the pre-liberation (pre-1971) days. The Pakistan government, bent on rapid industrialisation and modernisation of agriculture, provided liberal refinance facilities to specialised development finance institutions, who were encouraged to dole out large amounts of money to budding industrialists and large agriculturists. There were reports of borrowers bribing bank officials in cash or kind for getting loans. Large industrial loans required political patronage, some of which was thought to have had a price tag attached to it. Insider lending was common in private banks, as was the use of bribes to mobilise scarce deposit funds from owners or controllers of government and military funds. The incidence of fraud and forgery was however very limited and/or not made public.
Growth and Spread of Corruption
After independence, all private banks, excepting foreign banks, were nationalised and brought under the direct control of the bureaucrats. The government allowed the remission of interest and, in some cases, even the principal for borrowers who could claim that they had been adversely affected by the war of liberation.
The acute shortage of manpower in the banking sector forced the government to go for hasty, quota-based recruitment drives. The prolonged government ban on new recruitment of officers (forced upon by trade union pressure) even when the branch network was expanding rapidly created pressure for promotion from the clerical ranks. This resulted in a decline in the average quality of the work force.
The government's policy of mandated credit for agriculture, to be disbursed through local level government officials and rural power brokers, practically institutionalised corruption in agricultural lending. Dishonest bank officals took a 10 to 20 percent cut of the loan amount, as a matter of routine.
The new government inherited from its predecessor an enthusiasm for rapid industrialisation. Government-owned development finance institutions (DFIs), using soft donor loans, financed numerous projects. However, a large proportion of such loans represented political patronage to party supporters, former and serving civil / military bureaucrats, and their relatives. In such cases, the lending decisions were obviously not based on sound banking principles. At the same time, commercial banks offered lines of credit indiscriminately without reference to the customers' bankability, safe in the knowledge that the bank's lending risk would be covered by Bangladesh Bank's credit guarantee. The free-wheeling banking operations came to a shuddering halt in the early eighties, following the hardly unexpected revelation that the DFIs were burdened with large non-performing loan portfolios. The flow of donor credit dried up soon afterwards.
Large borrowers wilfully defaulted on the loan repayments to the DFIs and nationalised commercial banks (NCBs), emboldened by their close links with the corrupt civil-military bureaucracy. Subsequently, the defaulters extracted concessions in the form of interest waivers, segregation of loans into "blocked accounts", and repeated rescheduling. Some defaulters are alleged to have used the defaulted funds to start private banks and insurance companies. This gave them a further opportunity for insider lending and for diverting yet more funds to various pet ventures. Herein lies the origins of the 'default culture'.
The Situation Today
A recent study on the bank loan default problem found that in the sample group of 125 defaulters, 78% utilised political connections, including ministers' influence, to get loans sanctioned. Of the 37% directly involved with the ruling party, a large proportion had changed their political affiliation at least once.
Successive governments have made half-hearted attempts to tackle corruption in the banking sector. Recommendations made by various committees set up to investigate corruption never received the priority that they deserved. In some cases, the final report was not even published. The attitude of major donors was ambivalent. The Financial Sector Adjustment Credit programme (World Bank) and the Financial Sector Reform Program (USAID), two major aid projects focussing on the financial sector, neglected the issue of combating corruption in banks.
The political patronage enjoyed by the defaulters and dishonest senior bankers was sufficiently strong to prevent the Anti-Corruption Bureau (ACB) from investigating suspected bank officials without the clearance of the Prime Minister's Office (PMO). Defaulters were allowed to contest the 1991 general election. In the 1996 elections, the caretaker government initially took a strong stance against the participation of defaulters. The government later reversed its position and allowed defaulters to contest, provided they got their default loans rescheduled on payment of only a single instalment of 10% of the defaulted amount. After getting elected a Members of Parliament, their default status no longer mattered.
Recently, the government, with some sustained prodding from the donors, has brought in new laws to fight defaulters in spite of the powerful defaulter's lobby in the parliament. But these reform measures has not reversed the poor trend; the banking sector remains fragile and capital deficient. The proportion of total bad loans has increased (67% for DFIs, 40% overall) despite the fall in the proportion of classified loans disbursed during 1996-98. Today, the NCBs and many private banks of Bangladesh would be considered insolvent by international standards.
As for the default loan scenario, the entire focus has been on the borrowers. Bank officials have been very fortunate to escape blame for their role in many corrupt, or at best ill-judged, lending decisions. There appears to be a lack of awareness in the government and the banking community that bank officials can be penalised by the law for wilful or negligent conduct in disbursing loans.
Magnitude of Corruption
Reliable estimates of the monetary involvement in cases of bribery, fraud and forgery in the banking are hard to come by because of the high degree of secrecy maintained by the concerned parties. Good borrowers who are active abettors in the game prefer to conceal their involvement whereas defaulters are prone to exaggerate their costs of doing business with banks.
The cumulative losses through frauds and forgeries is estimated to be Tk 1 billion at the end of November 1998, at 0.2% of total bank deposits. Bribes related to agricultural loans are said to range between 10 to 20% of the loan amount; but a lower rate (2-10%) applies in the case of larger loans which are usually taken out by relatively influential borrowers. In the case of project loans for agriculture, fisheries, and dairy, bribes collected by the bank officials are sometimes shared with the local government project development officers. In the case of commercial loans, the banker not only collects outright bribes (1-5% of the loan limit), but often receives occasional gifts and regular hospitality or entertainment from the client. For term loans, the bribes range from 1 to 5 %, depending on the (a ) type and size of the projects, (b) special services, if any, to be rendered by the bank staff in preparation of the project feasibilty report and processing the loan proposal as a "package deal", and (c) the status of the person influencing the loan sanctioning decision. The successful borrower has to pay a further sum at the time of disbursement. Working capital loans involve a separate payment of 1 to 5% to the bank's managers, employees and trade union leaders.
Nature of Corruption
The diversity of bank services and the numerous steps involved in loan processing, disbursement, and monitoring provide corrupt bank officials with a wide range of opportunities for extracting bribes. The more common and significant of these include:
• Sanctioning of loans not on the basis of prudent banking principles but for some other considerations, such as
• outright bribes in the form of cash, valuable gifts, allotment of land, house construction, acquisition of apartments, share in business (usually in the name of dependants), appointment of dependants in good jobs, scholarships and admissions in educational institutions
• political pressure and patronage for posting, promotion, and extension of job tenure
• future lucrative employment in the borrower's company
• Over valuation of properties and assets of the borrower which are offered as collateral
• Cash credit without actual physical pledge of goods, contrary to documentary evidence
• Allowing withdrawal of funds in excess of or after expiry of the loan limit
• Loans sanctioned to the banks directors in driblets over a period, each sanctioned amount being within by the managing director's authorisation limit.
Institutional malpractice include:
• Payment of substantial contribution to ruling party political funds and to key middlemen who have an effective say in the granting of licences for opening a new bank or a new branch of existing bank
• Entertaining or bribing bureaucrats who have regulatory control over large potential deposit funds. An increase in the incidence of such practices is very likely given the increase in the number of private banks and the formulation of a new government policy which allows 40% of government funds to be deposited in private banks.
Causes of Corruption in the Banking Sector
The findings of the diagnostic study indicate that the following factors played a significant role in the growth and continuation of corruption in the banking sector in general, and the nationalised commercial banks in particular:
• The government's rapid drive towards industrialisation during the first decade following independence whereby large amounts of industrial loans financed from soft donor sources were liberally doled out to favoured persons.
• The government's policy of mandated credit for agriculture, disbursed through local level officials.
• Interference by senior government officials in lending decisions, directing the bankers to lend to dubious projects owned by political or business allies of the ruling party, in violation of sound banking principles.
• Leniency of successive governments towards known loan defaulters, most of whom belong to the highest social and political classes in the society.
• The poor calibre of bank officers, many of whom lack the requisite background and training needed to carry out proper banking functions.
• The ambivalent attitude of the major donors with regard to the issue of combating corruption in the banking sector.
• The growing power of politically backed trade unions.
• Low compensation package for bank officers and staff.
Reasons for the Continuation of Corruption
As a general proposition, grand corruption in the banking sector, manifested in the form of large loan defaults, has continued to fester because governments of the day either did not have the required level of commitment to combat this disease or did not consider it politically expedient to take action against the defaulters who had strong business or political links with the ruling cliche. In many cases, the influential ruling party members or the lawmakers themselves have been the direct or indirect beneficieries of bank corruption.
However, there are other deficiencies in the system which have allowed and encouraged the maintenance and growth of corruption. These include:
• Inadequate and ineffective internal controls within banks
• Weak supervision and monitoring by the Bangladesh Bank
• Reluctance of management to take appropriate disciplinary actions against recalcitrant and delinquent elements
• Archaic institutional procedures to deal with the delinquents
• Jurisdiction of Administrative Tribunals over the NCB personnel
• Pressures from politicians and trade unions
• An inefficient and corrupt Anti-Corruption Bureau
Suggested Remedial Measures
Serious and committed efforts towards reducing corruption in the banking sector could consider the following remedial measures:
• Appoint an Ombudsman exclusively for the banking sector.
• Set up special tribunals to facilitate expeditious trial of defaulters.
• File test cases against some delinquent large borrowers to send a strong signal to others.
• Retrench surplus manpower through "golden handshakes".
• Curtail trade union activities. Allow only one registered union per bank, and prohibit the installation of the trade union office within the bank premises.
• Restore the ACB's professionalism, expertise and credibility by drastic revamping it.
• High Courts could play a non-discriminatory and proactive role by issuing suo moto rules on the government why incidences of glaring corruption committed by ministers and other high level officials should not be properly investigated.
• Corruption should not pay and a corrupt person should not be allowed to enjoy his / her ill-gotten assets. The Penal Code should be amended to allow confiscation of such assets.
• Conduct both 'off-site' and 'on-site' inspections of banks. Look into the feasibility of mandatory audit of each branch by external auditors every alternate year at the cost of the inspected bank.
• Make external auditors more accountable for their failure to report gross irregularities.
• Delegate further the powers for sanctioning an disbursement of loans, without jeopardising prudent banking and security considerations.
• Bangladesh Bank should have complete and effective autonomy. The Governor and Deputy Governors should have fixed tenures. No civil servant should be appointed as Deputy Governor. The Governor and Deputy Governor should not be allowed to take up employment in private banks / non banking financial institutions within three years of retirement.
• Bank directors should not be allowed to borrow from the bank in which s/he is a director, to eliminate "insider lending" and reduce default culture. (This rule has recently been implemented by Bangladesh Bank).
• Greater transparency in political party funding sources will make it more difficult for political parties to receive major contribution from bank defaulters.
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Corruption in the power sector

Corruption in the power sector

Genesis of Corruption

Corruption in the power sector had not assumed serious proportion until after the independence of Bangladesh. In the 1960s, stealing of electricity was significantly more widespread in West Pakistan than in East Pakistan. Suspicions about corruption were mainly focused on the purchase and construction contracts relating to the power department headquarter, and not so much on execution of large projects or appointments of consultants of which there were many.

As shame and remorse once attached to corruption gradually vanished and certain sections of employees became gradually emboldened under protection of their Collective Bargaining Agents, corruption spread to a wider sphere of BPDB's activities and cases once confined to only subordinate staff extended to certain sections of officers.

Payment of a small percentage of a bill to the accounts section by contractors has become standard practice and is now taken for granted. The same is the case of gratification required by junior officers for certifying measurements, recommending quoted rates for unscheduled works, and for higher level officers approving bills. Engagement of ghost labour in the master roll, particularly during an emergency, is fairly common. These types of corrupt transactions would be fairly common in most government agencies and departments. But however prevalent such petty corruption may be, it is the large scale corruption associated with BPDB's technical and commercial functions that has been eating away at the vitals of the organisation and hurting the economy and the society.

Corruption in Procurement

Top officials in the BPDB have hinted that major corrupt practices in large contracts take place "outside the organisation", which would seem to indicate the ministry level. None, however, denied the existence of minor vices at different levels of BPDB, a phenomenon which they felt was common to most development-oriented government departments that handled large construction and supply works. In contrast, Dhaka Electric Supply Authority (DESA) officials suggested that corruption in procurement was not significant, while Rurual Electrification Board (REB) officials claimed that well-developed procurement procedures and effective supervision of their procurement system offered little scope for corruption.

The rate of corruption is generally thought to be between 15 to 20 % of the value of procurement contracts, although in limited cases it was reportedly as high as 30%. Illegal gratifications that are required to be paid are of three forms:

1. Payments for information, which could give a bidding contractor an edge in the bidding process. The amounts involved are usually small since junior grade officers and subordinate staffs are involved.

2. Payments for manipulating tender specifications to favour certain types or brands of plant and equipment or for influencing the evaluation criteria. Fairly senior officials are involved here and the process is more difficult and risky. Hence larger payments are involved.

3. Payments for recommendation and approval of contracts are very large and made to high level officers in the BPDB or the Ministry of Energy.

Senior BPDB officials have to put up with direct approaches from bidders during the evaluation stage, as well as disguised lobbying by influential people in government (e.g. late night telephonic dropping of hints). Even members of the Cabinet Purchase Committee, sitting in formal meetings, have been known to raise queries on matters not contained in the official files placed before them.

Corruption in Getting a Connection

Getting a electric connection from the BPDB or DESA is a very difficult process, involving hassles, delays and, for the average consumer, bribery. The application form for a service connection asks for details of property ownership, lease deeds, and, for industrial connections, clearance certificates from the fire department and the Health Division. It is easy to find faults in the dozen or so attachments, unless appropriate palms are greased. Six signatures of various BPDB officials are required for the approval (shortened from the previous thirty), while the time involved for moving the case from one office to another is inversely related to the amount of gratification paid.

A new domestic consumer may get away with paying between Taka 5,000 to 10,000, but a commercial or industrial connection would cost a lot more. For example, a small factory requiring a bulk low-tension connection of 45 KW capacity could easily spend Tk 50,000 or more. For small and medium enterprises, a connection "surcharge" of Tk 1,000 per KW is the norm. The ever-helpful BPDB or DESA employees offer their services for arranging new connections, thereby avoiding the hassle of doing the complete desk round. Very large high tension consumers have a much easier time of it, as they generally are influential persons. For them, bribing is mainly limited to paying baksheesh to working level people.

Causes of Corruption in BPDB

From the above discussion, the following factors emerge as the significant causes of corrpution within or connected with the BPDB:

  • Centralisation of decision-making powers with respect to procurement of capital equipment in the hands of the political government, who are less accountable and controllable in comparison to BPDB officialdom.
  • The acute shortage of generation capacity and consequent scarcity of electricity which has opened up many opportunities for corrupt transactions.
  • Poor demand management which has resulted in very high tarriff rates for some classes of consumers.
  • Consistent failure of successive governemts over the past 30 years to take effective action against beneficiaries and providers of stolen electric power.
  • Over-manning and the growing power of politcally backed trade unions which support and profit from the corruption related to non-technical system loss, local contracts, etc.
  • Unnecessarily stringent and lengthy procedures for getting a new connection.

Why Corruption Continues Unabated in BPDB

To deal with electricity theft, there simply is not enough special magistrate courts and mobile courts to handle the huge backlog of cases to prosecute. The few fines, disconnections and even imprisonment have not created any deterrent effect. Illegal consumers, whose lines have been disconnected, are able to re-establish the connection in no time, illegally of course. The rate of disposal of cases is very slow, with the magistrates and BPDB / DESA blaming each other for the delay. The vested interests are too strong as the scope for making illegal gains is considerable, both in terms of ease of operation and the money amounts involved.

There have been no significant anti-corruption drives within the BPDB nor any court actions against corrupt employees. On occassions, mid-level officers have been suspended from duty on suspicion of moral turpitude and financial irregularities. But most were re-instated for lack of evidence. Instances of departmental inquiries or disciplinary actions against lower grade employees are even rarer due to the supposed or real fear of retaliation by trade unions.

The network of BPDB officers and staff who have been consistently robbing DESA and BPDB with impunity, with the backing of so-called trade unions, has growth in strength over the last three decades. But no matter however powerful this corrupt group of petty thieves appear to be, they are no match for the forces at the government's disposal. Therefore, the obvious conclusion to be drawn is that an absolute lack of commitment and the absence of political will on the part of the government are nurturing the continuation of corruption. The maintenance of the status quo benefits many vested interests. Conscientious officers eventually fall in line with the system, some perhaps joining it, when they discover that the known culprits enjoy the protection of powerful godfathers, some of whom come in the guise of lawmakers.

Suggested Remedial Measures

Given the institutional hold of corruption within BPDB and DESA, radical changes and drastic measures will be needed to redress the situation. To date no government has demonstrated the political will to take on the powerful nexus composed of dishonest workers, corrupt officials in the agencies and the ministry, opportunist traders, lobby groups and most certainly political leaders. A government having the required political conviction might have considered the following options:

  • Declare electricity generation, transmission and distribution as an essential service, and enact a law banning all trade unions in organisations involved with these functions for five years.
  • Arrange sufficient funds for "golden handshakes" to all corrupt meter readers, bill clerks, and inefficient supervisors whose assets do not match their legal income in order to clean the slate in one go.
  • Until new meter readers, bill clerks, and supervisors are appointed or alternative arrangements made, induct the help of non-commissioned army officers in meter reading and billing in order to establish a benchmark position.
  • Convert all distribution organisations into limited companies with private sector participation and allow them to function as normal private companies without interference from the government.
  • Establish a regulatory body to monitor, co-ordinate, regulate and facilitate the functions of all the power utility organisations and ensure that consumer rights are protected.
  • Rationalise the staffing of utility organisations, revise salaries and allowances making them commensurable with the cost of living, provide employment on contract basis with the flexibility of hiring and firing.
  • Conduct intensive training programmes for skill improvement in all important functions (BPDB's current training budget is a paltry 0.2% of the annual operating budget).
  • Allow utility companies total freedom to handle own procurement without having to go to the ministry or the Cabinet Purchase Committee, with provision for regular external audits built into the system.

A solution for electricity problem

Bangladesh have a lot of problems in electricity sector. now we are producing electricity by burning gas to produce electricity. but i am giving a perfect solution for our problem.

Solar power

Learn the essential basics of using solar power so you can understand your project.
Planning a solar project for electricity begins with understanding this section.

An excellent place to start for those just beginning.
Solar power works well for most items except large electric appliances that use an electric heat element such as a water heater, clothes dryer and electric stove - for example - or total electric home heating systems. It is not cost effective to use solar power for these items. Conversion to natural gas, propane or other alternatives is usually recommended. Solar power can be used to operate a gas clothes dryer (Maytag, etc) because the electrical requirement is limited to the drum-motor and/or ignito-lighter, but not a HEAT element for drying the clothes, for example.

We recommend you also review our page Helpful Solar Power Glossary which will provide useful terms and General Construction Techniques for insight into energy efficient new construction or retrofitting energy efficient principles into your building project.

Solar power:
Using solar power to produce electricity is not the same as using solar to produce heat. Solar thermal principles are applied to produce hot fluids or air. Photovoltaicprinciples are used to produce electricity. A solar panel (PV panel) is made of the natural element, silicon, which becomes charged electrically when subjected to sun light.

Solar panels are directed at solar south in the northern hemisphere and solar north in the southern hemisphere (these are slightly different than magnetic compass north-south directions) at an angle dictated by the geographic location and latitude of where they are to be installed. Typically, the angle of the solar array is set within a range of between site-latitude-plus 15 degrees and site-latitude-minus 15 degrees, depending on whether a slight winter or summer bias is desirable in the system. Many solar arrays are placed at an angle equal to the site latitude with no bias for seasonal periods.

This electrical charge is consolidated in the PV panel and directed to the output terminals to produce low voltage (Direct Current) - usually 6 to 24 volts. The most common output is intended for nominal 12 volts, with an effective output usually up to 17 volts. A 12 volt nominal output is the reference voltage, but the operating voltage can be 17 volts or higher much like your car alternator charges your 12 volt battery at well over 12 volts. So there's a difference between the reference voltage and the actual operating voltage.

The intensity of the Sun's radiation changes with the hour of the day, time of the year and weather conditions. To be able to make calculations in planning a system, the total amount of solar radiation energy is expressed in hours of full sunlight per m², or Peak Sun Hours. This term, Peak Sun Hours, represents the average amount of sun available per day throughout the year.

It is presumed that at "peak sun", 1000 W/m² of power reaches the surface of the earth. One hour of full sun provides 1000 Wh per m² = 1 kWh/m² - representing the solar energy received in one hour on a cloudless summer day on a one-square meter surface directed towards the sun. To put this in some other perspective, the United States Department of Energy indicates the amount of solar energy that hits the surface of the earth every +/- hour is greater than the total amount of energy that the entire human population requires in a year. Another perspective is that roughly 100 miles square of solar panels placed in the southwestern U.S. could power the country.

The daily average of Peak Sun Hours, based on either full year statistics, or average worst month of the year statistics, for example, is used for calculation purposes in the design of the system. To see the average Peak Sun Hours for your area in the United States, you can click the following link which will open a new window - just close it [X] when you're done to return here; U.S.-Solar Insolation Choose the area closest to your location for a good indication of your average Peak Sun Hours.

For a view of global solar insolation values (peak sun-hours) use this link: Global Peak Sun-hour Maps , then, you can use [back] or [previous] on your browser to return right here if you want to.

So it can be concluded that the power of a system varies, depending on the intended geographical location. Folks in the northeastern U.S. will need more solar panels in their system to produce the same overall power as those living in Arizona. We can advise you on this if you have any doubts about your area.

GLOBAL CORRUPTION REPORT 2008: Corruption in the Water Sector
Transparency International
GLOBAL CORRUPTION REPORT 2008: Corruption in the Water Sector
Cambridge University Press, 2008
For full report please visit: www.transparency.org
BANGLADESH (Section 7.3, pp. 181-6)
Iftekhar Zaman, Tanvir Mahmud
Corruption Perception Index 2007: 2.0 (162nd out of 180 countries)
Conventions
ADB-OECD Anti-Corruption Action Plan for Asia-Pacific (endorsed November 2001)
UN Convention against Corruption (accession February 2007)
Legal and institutional changes
● The Public Procurement Act, passed on 6 July 2006, provided comprehensive legal provisions to prevent corruption and promote competition on a level playing field. The Manual of Office Procedure (Purchase), inherited from the colonial era and last revised in 1977, previously laid down methods for procurement in the public sector. The caretaker government engaged various stakeholders, including TI Bangladesh, to review the new procurement rules.1 A public-private review committee on public procurement was formed on 28 May 2007 to assess the impact of the new law, but had yet to start functioning at the time of writing.
● In February 2007 the government amended the Criminal Procedure Code Ordinance, the final step towards re-establishing the independence of the judiciary (see Global Corruption Report 2007).2 The legislation had been postponed more than 20 times since 1999, when the Supreme Court first ruled in favour of greater separation between the judiciary and the executive branch of government. According to the judgment, the separation of the judiciary would only be cmplete

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when four rules came into effect.3 On 7 May the Supreme Court accepted an amendment to the Judicial Service Pay Commission Order and directed the government to complete the process of the separation of the judiciary by 19 July. This was also the deadline for the government to create a number of courts, courtrooms and chambers for judges and magistrates.
● In a related move, the government established a financial intelligence unit (FIU) in March 2007 to combat financial crimes, and retrieve assets and money laundered overseas.4 Established within the framework of the amended Money Laundering Prevention Ordinance of 2007, the FIU will operate as part of the central bank’s anti-money laundering department. Government sources said the FIU will play a key role in recovering the large sums of money siphoned off through political

● The Anti-Corruption Commission (ACC), set up in February 2004 (see Global Corruption Report 2006), remained ineffectual for several reasons, including political bias and lack of commitment by its three government-appointed commissioners. Its jurisdiction was seriously limited by rules that prevented access to banking, finance, money laundering, foreign exchange records and the activities of multinational corporations. In the Anti-Corruption Act 2004 these items were not included in the schedule and the Commission’s freedom was further curtailed by government control of its budget and administrative powers. On 22 February 2007 the caretaker government appointed three individuals of integrity to replace the original commissioners. With the support of a joint task force of military officers, the new ACC embarked on a high-profile, anti-corruption drive, publishing on 18 February a list of 50 individuals suspected of corruption, including ministers, lawmakers, politicians and businessmen (see below). 6 On 7 March Tarique Rahman, son of former Prime Minister Begum Khaleda Zia, was arrested.6 The most common allegations were disproportionate wealth, extortion, abuse of power and the plunder of relief goods. Twelve former ministers and MPs were allegedly involved in an extortion worth over Tk320 million (US $4.7 million) from various companies and construction projects.7 On 29 March, the ACC filed a case against former housing and public works minister, Mirza Abbas, and 11 engineers for selling 18 abandoned houses at lower than market prices, costing the government 3 These rules are the Judicial Service Commission Rule 2002; Bangladesh Judicial Service Pay Commission Rule 2002; the Bangladesh Judicial Service (Service Constitution, Composition, Recruitment, Suspension, Dismissal and Removal) Rule 2002; and Bangladesh Judicial Service (Posting, Promotion, Leave, Control, Discipline and other

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about Tk1.3 billion (about US $18 million).8 On 4 July a tribunal sentenced former state minister for civil aviation, Mir Mohammad Nasiruddin, to 10 years imprisonment for illegally accumulating wealth and three more years for hiding assets worth Tk6.7 million (almost US $100,000) in his wealth declaration to the ACC.9
● The Election Commission was reconstituted on 5 February 2007 after the replacement of controversial commissioners with a reputation for eroding public trust.10 It subsequently embarked on a series of consultations for the reform of election rules, aimed at creating a more equal playing field free from corruption and the influence of black money. The proposals being discussed include: mandatory registration of political parties; transparency of party funding; holding local and national elections for party leadership; reservation of one-third of leadership, positions for women; disbarment of those found guilty of corruption; de-linking professional and student bodies from partisan politics; computerised voter lists; provision of ‘no votes’11; and barring of candidacy for election for government officials for three years.
● The Micro-Credit Regulatory Authority Act was passed in July 2006 and will facilitate the establishment of an institutional mechanism to ensure transparency and accountability in the operation of organisations offering micro-credit. Despite a large scale growth in micro-financing in Bangladesh, there had previously been no regulatory framework for this sector. The Act requires all micro-financing institutions, including non-profit organisations, cooperatives, societies and profit-making companies, to obtain a licence from the authority established by the Act. The authority is an independent legal entity managed by a board of directors comprised of the governor of the Bank of Bangladesh and six government officials.
Taking care of corruption Bangladesh is exploring a unique opportunity to reverse the acute failure of governance and pervasive corruption that has bedevilled it for many years. The loss to bribery in five public service delivery sectors was estimated at 7.9 percent of household income in 2005.

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Amid the pre-election violence that brought the capital, Dhaka, to a standstill, President Iajuddin Ahmed appointed Fakhruddin Ahmed, a well-respected former central bank governor and World Bank economist, as ‘chief adviser’ of the caretaker government on 11 January 2007. The concept of a caretaker government dates back to 1990 when, with the support of political leaders and most of the population, Chief Justice Shahabuddin Ahmed was appointed head of an interim government. The aim was to stem the growing violence between Bangladesh’s two largest political alliances led by the Awami League (AL) and the Bangladesh Nationalist Party (BNP). Though assembled without constitutional endorsement, the 1990 caretaker government was ratified by parliament a year later and since 1996 has constituted a legitimate, non-partisan alternative to what has often proven a chaotic and corrupt manifestation of democracy. The current caretaker government14 differs from its forbearers by enjoying explicit support from the armed forces. The issue of military intervention in day-to-day politics came into focus when the army chief, Lieutenant General Moeen U. Ahmed, told a public seminar in Dhaka that Bangladesh needs its own ‘brand of democracy’.15 However, on a number of other occasions he has said the army had no specific interest in politics. In spite of such assurances, there remains concern as to whether the army will withdraw from the political environment. Elections are currently due in late 2008. In his opening address on 21 January 2007, Fakhruddin Ahmed made a commitment to fighting corruption and purging politics from the influence of black money.16 The speech was followed by a series of arrests of former ministers, MPs and members of their families, allegedly involved in corruption. On 26 July a tribunal sentenced Mohiuddin Khan Alamgir, a former state minister and Awami League member, to 13 years imprisonment and fined him Tk10 lakh (US $14,850) for amassing Tk3.27 crore (US $485,525) through misuse of power and concealing it in his declaration of assets.17 On the same day, a Natore court sentenced former deputy minister for land and BNP leader, Ruhul Kuddus Talukdar Dulu, to five years in prison for arson; one year for causing damage and looting; one year for rioting with deadly weapons; and one year for abetting

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crimes. On 27 August a court in Dhaka sentenced former communications minister, Nazmul Huda, and his wife Sigma to seven and three years in prison, respectively, for involvement in a Tk2.5 crore (US $356,350) embezzlement.18 Reversing Bangladesh’s corruption trends will prove long and hard. The institutional reforms mentioned above are only the beginning of the process. Much depends on the extent to which anti-corruption can be mainstreamed into public service as a whole, a process that could be beset mby inertia and resistance to change. The successful prosecution of those charged by the ACC is also open to question. Although the Commission has enlisted well known attorneys, those charged can afford the very best lawyers in a country that has rarely seen the monopoly of power and influence broken in a court of law. Sceptics will look for historical examples in which military-led anti-corruption drives have simply led to the entrenchment of the military in power. The war on corruption was greeted by unprecedented popular support, but like any other war it has brought collateral costs in terms of the erosion of human rights, public harassment and insecurity. Tens of thousands of people have reportedly been arrested since the drive started, with human rights groups alleging widespread torture and deaths in custody.19Political activity is banned under the state of emergency, but elections are due by the end of 2008. It is widely hoped that anti-corruption reforms will have taken root by then, though whether the new government that emerges from that ballot will adhere to them remains equally open to question. All transitions are fraught with risk. Nevertheless,
considering the changes already witnessed under the caretaker government, there are reasons for guarded optimism.
Judicial independence nearly restored According to a recent survey, two-thirds of all people who interacted with the lower judiciary said they were forced to pay bribes amounting to one-quarter of their annual income.20 A series of constitutional amendments by military and quasi-military regimes from 1975–91 gave the chief executive authority to appoint, promote and transfer judges and magistrates, bypassing the chief justice altogether and mortally injuring the independence of the judiciary. Though democratic rule 18 Insert reference here..

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was restored in 1991, three successive governments found it convenient to retain control over the judiciary and to politicise it further. In the historic Masdar Hossain ruling in 1999 (see Global Corruption Report 2007), the Supreme Court ordered the government to re-establish an independent judiciary and amend criminal procedure to meet the objective of separating it from the control of the executive branch. The government in power at the time, and the one that followed from 2001 to September 2006, made piecemeal reforms while obtaining nearly two dozen separate court extensions to legitimise their foot-dragging with regard to implementing the Supreme Court decision. Against this backdrop the caretaker government approved the amended criminal procedure code ordinance on 7 February 2007, one of four legal steps toward restoring the independence of the judiciary.21 On 7 May the Supreme Court approved further amendments to the judicial service pay commission order and three other orders regarding judicial service and civil procedure amendments (previously, judges and magistrates had been treated as just another branch of the civil service), and directed the government to complete the separation of judiciary by 19 July. As significant as these developments were, the judiciary’s absolute independence will only be realized when article 116 of the constitution is amended, and this will only be after the election of a democratic government at the end of 2008. Water corruption and land grabbing in Dhaka
Like other sectors of the Bangladeshi economy, water is plagued by corruption and failures of integrity. An analysis of episodes of corruption reported in the print media from January– December 2006 shows the following picture.

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Percentage
Source: TI Bangladesh, ‘Corruption Database 2006’, (unpublished). The data show that public service officials were key actors in corruption in 84.8 percent of revealed cases, while powerful individuals, including contractors and politicians, were key actors in the remainder. Reports indicate that public service officials have flouted financial rules in tender processes, while
in many cases they have been inefficient or negligent of the public interests. Engineers and other officials have been involved in corruption in major development projects, such as irrigation, river dredging and flood prevention. In March 2007 the ACC was investigating cases of corruption in different projects run by the Ministry of Water Resources, estimated to have cost up to Tk444 crore (approximately US $ 1.5 billion) during 2001–06.22 One report23 in 2006 concerned the illegal dredging of sand from the Monu riverbed, threatening the protective embankment of the nearby town of Moulvibazar. An influential person with local political links had removed the sand to landfill his plot in the town. Another category of rampant corruption in urban areas involves encroachment onto the lakes and rivers flowing through cities, especially in Dhaka. Illegal occupation of the shoreline in Dhaka’s Gulshan-Banani-Baridhara Lake threatens the lake’s very existence. In one case of de-requisition, 31 acres of the lakeshore were due to be reclaimed from private land grabbers.

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powerful individuals with political links easily obtained court injunctions against reclamation of their squatted land. In connivance with government officials, a well-organised syndicate of land grabbers has long been active in the business of securing prime sites in the city by filling the lakeshore with earth and building structures overnight.25 Officials in the Capital Development Authority (CDA) are most often discovered working in tandem with land grabbers, which is the main reason for the failure to demarcate, develop and conserve water bodies crucial for Dhaka’s environment, water supply and drainage. At the time of writing, the caretaker government had launched a demolition drive against illegal structures encroachments.