German agency’s grant raises concerns over alleged misuse of funds

A plan to allegedly misuse funds has been drawn up in the name of a grant. Now, only approval remains. The project, titled “Innovation Climate Smart Urban Development,” aims to explore ways to promote climate resilient urban development in a country facing extreme risks from climate change.

The project has an estimated cost of Tk 874 million, which will be provided entirely as a grant by the German Development Cooperation agency, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), an organization working on behalf of the German government. However, questions have been raised about expenditure under various budget heads.

Of the grant, Tk 393.4 million has been earmarked for foreign travel under the guise of foreign training, foreign consultants and management charges for GIZ itself, the agency providing assistance. Some expenses have also been allocated for local personnel. The proposed spending gives the impression that a large portion of the project funds could be shared among those involved.

The project has been proposed by the Ministry of Local Government, Rural Development and Cooperatives. It is scheduled to be presented at a meeting of the Executive Committee of the National Economic Council (ECNEC) on Sunday. If approved, the Local Government Engineering Department (LGED) will implement it from this year through June 2029.

Former Planning Secretary Mamun Al Rashid told Agamir Somoy, “This is certainly an irregularity. GIZ has no right to put grant money into its own pockets. In this case, GIZ is not the only one. There are several other organizations that bring grants in our name and use various tactics to fill their own pockets. Some people in this country are involved in this process. They are appointed as consultants and seek their own benefits. The country does not gain much from this. The ERD should not have the attitude that whatever can be obtained is good simply because it is grant money. These practices should be stopped.”

A review of the proposed expenditure under different budget heads shows that Tk 185.2 million will be spent on GIZ management fees, Tk 165.8 million on international consultants, Tk 406.7 million on national consultants, Tk 26 million on foreign training, Tk 35 million on domestic training, and Tk 5 million on national and local seminars or conferences.

However, the project’s main activities involve identifying problems caused by the adverse effects of climate change in four municipalities: Chapainawabganj, Charghat, Gaibandha and Sirajganj. The project will also provide assistance in preparing and implementing plans to address these problems.

In addition, 12 pilot projects will be implemented in the four municipalities to address the effects of climate change. Relevant stakeholders will also receive training to strengthen their capacity for climate resilient and inclusive urban development in the project areas. However, no separate allocation has been made for the 12 pilot projects.

Former Economic Relations Division (ERD) Senior Secretary Kazi Shafiqul Azam previously told Agamir Somoy, “This is not desirable. The grant is secured in the name of our country. If it is not used effectively, that amounts to a form of deception. It should not be neglected simply because it is grant money. There must be accountability for it as well. They should be monitored strictly.”

Information gathered through inquiries and conversations with several officials suggests that GIZ often follows similar practices. There are allegations that the agency devises ways to channel a large portion of grant funds into its own coffers.

Previously, allegations emerged in connection with another project that the agency spent half of a total Tk 610 million grant at its own discretion without informing the relevant government officials. Most of the remaining half was allocated to consultants, training and related expenses. Only a nominal amount was set aside for beneficiaries.

A similar incident occurred in a project titled “Strengthening Urban Integration Capacities of Internally Displaced Persons and Supporting Host Communities.” The project was under the Ministry of Social Welfare. However, the relevant officials were unaware of the expenditure. Various complications arose later over the project’s approval.

The attitude among responsible officials at the ERD is that whatever amount can be secured as a grant is a gain. As a result, they do not take a particularly strict approach in such cases.

A source familiar with the matter confirmed to Agamir Somoy that Planning Secretary S. M. Shakil Akhtar had said the project would provide a plan for developing climate resilient cities if implemented. In the future, activities could be carried out in other municipalities in accordance with that plan.

As the project will be funded entirely through foreign grants, preparations have been made to place it before ECNEC for consideration. However, he had not examined what was actually included in the proposal.