World Bank to resume funds for MUTP

The finance ministry has indicated to the World Bank that it is willing to discuss an "alternative" procurement mechanism for health projects like the Reproductive and Child Health programme, funding for which has been stopped following allegations of corruption.

Officials said Finance Minister P Chidambaram had written a second letter to the World Bank after receiving the latter's response to an earlier one in which the bank had said it would resume funding for the $940-million Mumbai Urban Transport Project later this month.

The bank said it had to suspend fund disbursement for the MUTP as an exceptional measure but was now satisfied with the positive measures undertaken by the Mumbai Metropolitan Region Development Authority, the nodal agency for implementing the MUTP, and would resume funding in the last week of April.

The bank had in March stopped a $150-million aid for the road component of MUTP until concerns about the equitable treatment of people dislocated due to the work were resolved.

In the second letter, Chidambaram is understood to have said the government is willing to discuss alternative procurement mechanisms for the projects.