VZCZCXRO9253
PP RUEHROV
DE RUEHKH #1774/01 2051232
ZNY CCCCC ZZH
P 241232Z JUL 06
FM AMEMBASSY KHARTOUM
TO RUEHC/SECSTATE WASHDC PRIORITY 3862
INFO RUCNIAD/IGAD COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 02 KHARTOUM 001774 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 07/24/2016 
TAGS: EFIN ECON PGOV EBUD PREL EAID IBRD SU
SUBJECT: WORLD BANK AND GOSS AT LOGGERHEADS OVER JUBA ROADS 
AND HOUSING CONTRACTS 
 
REF: KHARTOUM 1624 
 
Classified By: P/E Chief Eric Whitaker for Reason: Section 1.4 (b) and 
(d). 
 
¶1. (C) Summary:  Since canceling two roads contracts over 
transparency and accountability issues (reftel), the World 
Bank (IBRD) has received both public and private criticism 
from officials from the Government of Southern Sudan (GoSS). 
The IBRD/MDTF officials in Juba have started a campaign to 
correct misinformation regarding the Bank.  After a quote 
successful unquote meeting with SPLM Secretary General Pagan 
Amum earlier in the month, an IBRD/MDTF official detailed a 
difficult July 19 meeting with Government of Southern Sudan 
(GoSS) Vice President Riek Machar.  According to the 
Bank/MDTF official, the GoSS has now decided to go ahead 
unilaterally with contracting projects that lack transparency 
and proper accounting, a process which may have already 
consumed most of the GoSS budget for 2006 and 2007.  This 
comes at the same time as an internal IBRD report evaluating 
Multi-Donor Trust Funds (MDTF) worldwide, which cites the 
Southern Sudanese MDTF as suffering from a lack of donor 
support, an absentee IBRD 
management, and a donor government with a lack of capacity 
and possible corruption.  End summary. 
 
-------------- 
An Easy Target 
-------------- 
 
¶2. (C) During the past few months, the Bank has become an 
easy GoSS scapegoat for the slow pace of infrastructure 
development in Southern Sudan.  Many government officials 
have claimed that the MDTF is too bureaucratic and that the 
GoSS would never figure out how to expend MDTF funds.  An 
MDTF official said that he has had meetings with officials 
from the Ministry of Transport and Roads and the Ministry of 
Housing, Public Utilities and Urban Development explaining 
the process of following basic tendering processes and hiring 
a procurement specialist, who has been identified, to oversee 
the contracts.  The official suspects that these ministries 
are hesitant to do this due to corruption, and points out 
that there has been no problem with the Ministries of Health 
and Education, which has already started implementing MDTF 
projects.  At one point, the Bank official referred to an 
internal USAID memorandum that he claimed to have seen that 
cited evidence of misconduct in the area of infrastructure. 
 
¶3. (C) At the same time, the World Bank has hired a 
contractor to perform a preliminary audit of all the MDTFs 
worldwide.  A draft of the report describes a series of 
problems from all directions.  It says that the donor 
countries to the MDTF have refused to politically defend the 
fund from the GoSS, and that there is a lack of 
differentiation between the MDTF and the World Bank, which 
manages the fund.  It also describes problems and 
miscommunications created by a World Bank management staff 
that is far from Juba and does not have the personal 
relationships or understanding of local conditions to manage 
the money effectively.  On the government side, it cites 
problems with the nascent government's absorptive capacity 
and possible corrupt forces resistant to proper controls. 
Finally, it refers to an INGO contractor as poisoning the 
waters for the MDTF and working to exclude other INGOs from 
working with the Ministry of Finance.  The Bank official said 
this INGO was BearingPoint, but explained that the proble 
m was not with BearingPoint overall, but just the top two 
people who were not working with others and who were a 
barrier to international assistance from other groups. 
 
--------------- 
A Harsh Meeting 
--------------- 
 
¶4. (C) To address the concerns of the report and counter what 
he believed was a misinformation campaign from within the 
infrastructure ministries, the MDTF official has started 
meeting with GoSS representatives.  The official first met 
with SPLM Secretary General Pagan Amum, a meeting he 
described a successful and most likely ensuring the future of 
the Bank in Southern Sudan. 
 
¶5. (C) However, the Bank official told the CG that a July 19 
meeting between the World Bank Country Director and his 
delegation and Vice President Machar, who is also Minister of 
Housing, Public Utilities and Urban Development, was harsh, 
with Machar accusing the Bank of blocking disbursement of 
Multi-Donor Trust Fund (MDTF) resources, thereby preventing 
the GoSS from delivering basic services to Southern Sudan. 
The official said that Machar ended the meeting by declaring 
that the Bank had made up its mind and was not interested in 
seeking common ground. 
 
KHARTOUM 00001774  002 OF 002 
 
 
 
----------------------- 
The Tip of the Iceberg? 
----------------------- 
 
¶6. (C) The Bank official said that the unilateral GoSS 
signature of the two projects was by no means unique.  There 
were credible reports that many ministries had already signed 
contracts committing their resources to a range of projects. 
He said there are no contracting guidelines, and that any 
minister could commit GoSS funds up to the limit of his or 
her budget line with no accountability.  At issue was how 
much money had been committed and how well this had been 
coordinated.  The Bank official said that he had received 
credible reports from GoSS officials that some ministries had 
signed so many contracts that the GoSS budgets for 2006 and 
2007 had already been committed to projects centered on Juba. 
 If the reports were correct, there would be little if any 
money to transfer to the ten states. 
 
¶7. (C) The Bank official said that, for now, it is impossible 
to ascertain what has been committed by various parts of the 
GoSS, and how this correlates to available resources and the 
need to hold in reserve funds for salaries and other 
recurring expenses.  Bank attempts to discuss with an Under 
Secretary of the Ministry of Finance how the GoSS tracks 
 
SIPDIS 
spending against available resources met with rebuff.  The 
Under Secretary told the Bank team "to keep your noses out of 
GoSS affairs." 
STEINFELD