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Washington Post: World Bank, India to Probe 5 Health Projects

March 15, 2008
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By ANTHONY FAIOLA

The World Bank and the Indian government have launched official investigations in response to an internal bank report that found "serious" incidents of fraud and corruption in five bank-financed health projects in India.

The findings in the report, released in January by the World Bank's internal investigation arm, include possible bid-rigging in a bank-funded program that may have distributed faulty HIV-test kits to clinics and blood banks in India. Although the bank did not specify which allegations it would probe, its board Thursday agreed to work with the Indian government to conduct independent procurement audits.

The bank said it would launch nine separate investigations that could lead to broad institutional revisions of how its programs are monitored and conducted. The government of India also referred three related cases to its Central Bureau for Investigation.

"We take these indicators of fraud and corruption extremely seriously," World Bank President Robert B. Zoellick said in a statement. "Working with the Indian authorities, we will take action against those responsible, including debarment and sanctions against firms and individuals from doing business with the Bank and disciplinary action against bank staff if warranted."

Critics said the case has highlighted a history of lax oversight on a number of World Bank projects. Yesterday, some of them took aim at the bank for a slow, convoluted response to allegations of corruption in the India projects.

The report, published by the bank's Department of Institutional Integrity, reviewed funds for five projects, some dating back to 1997, to combat HIV-AIDS, malaria and tuberculosis. Some of the most notable findings involved programs aimed at preventing the spread of HIV, the virus that causes AIDS, including funds for HIV-test kits.

The report noted that five medical facilities in Mumbai that received HIV test kits from one supplier hired by the Indian government and paid with World Bank funds had complained in 2004 and 2005 of high rates of false negatives and other invalid results. After reviewing data on test-kit use, the examiners determined that "some of the test kits supplied by particular companies often performed poorly by producing erroneous or invalid results, potentially resulting in the further spread of disease or in the wastage of blood."

In addition, the examiners found evidence of corruption. The review showed one supplier had won a test-kit contract even though the firm appeared not to have complied with technical specifications, had submitted apparently fraudulent documents and was not the lowest bidder.

The findings appeared to lend credence to warnings from Kunal Saha, a physician specializing in AIDS retained by the World Bank to review some of those programs last April. After his trip, Saha said he had brought evidence of faulty test kits to the attention of both Indian and World Bank officials in May. Of particular concern, he said, were high rates of false negatives, which posed the risk of tainting blood supplies and failing to notify HIV-positive patients of their conditions.

"But nothing was done," said Saha, a self-described crusader who founded a patients' rights group in India after the death of his wife there in 1998 from what he says was medical negligence. In recent months, he has worked closely with the Government Accountability Project, a Washington nonprofit group, to press the bank on faulty HIV test kits in India. "Everyone did everything they could to ignore this," he said.

World Bank officials said that following Saha's claims, they hired a consultant late last year from the Centers for Disease Control and Prevention to review the data. The consultant's findings, the officials said, did not support Saha's opinion that the kits were faulty. In a news release dated Dec. 14, 2007, and distributed in India by health authorities there, Saha's findings were directly refuted. The statement said there was "no evidence of use of poor quality HIV test kits in India."

Despite the examiners' findings, Kees Kostermans, the bank's lead public health specialist for the South Asia Region, refuted claims that some patients tested with some kits in India may have received false results, and said yesterday that he remained confident that the HIV test kits were not faulty. He cited a second outside consultant, Australian HIV expert Elizabeth Dax, who was contracted for a further program review in January. Her review, Kostermans said, indicated that the problems with false negatives were a result of human error rather than with the kits.

"There is no evidence in the data that we reviewed that any patients were given a final false negative HIV results," he said.

Kostermans said the World Bank had received notification from the Indian government that all of the kits in question had stopped being used in 2006. But Saha said he uncovered evidence last April that the kits were still being used in at least one hospital.

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