The World Bank's announcement of a new $14 million grant to the government does not

lessen the importance of a comprehensive government investigation into the instances

of misprocurement uncovered in 43 Bank-funded contracts, German Ambassador Pius Fischer

told the Post.

In a statement announcing the grant on June 28 for its Public Financial Management

and Accountability Project, the Bank said the grant is intended to support improvements

in the management of and accounting for public finances, and is a "key component"

of the Bank's drive to improve governance and fight corruption.

Awarding the government a new grant so soon after the discovery that $11.7 million

had gone astray through misprocurement, may seem incongruous. But far from letting

the government off the hook, the new grant highlights the importance placed by international

donors on the government committing itself to a complete investigation of the Bank's

finding of corrupt practices.

"This reinforces the seriousness of the problem," Fischer said. "The

donors, who have a certain responsibility to taxpayers in their countries, and the

shareholders of the World Bank, are seriously concerned regarding this issue - it

is very important that the government takes this seriously and starts a proper investigation."

The new project is aiming to ensure that misprocurement scandals like that which

has unravelled over the last month do not happen again.

"It supports a long-term program of critical reforms for improving public financial

management," said Nisha Agrawal, country manager for Cambodia, in the statement.

"In doing so, [it] helps to strengthen fiduciary systems."

But Fischer said it does not mean that the government can evade its responsibility

to investigate and hold to account those responsible for the recent instances of

misprocurement.

"The World Bank has certainly put enough evidence on the table," he said.

"The investigation could be started by the relevant ministries now."

Fischer, who raised the issue of the World Bank's allegations of corruption and the

Cambodian government's response at the quarterly Government Donor Coordinating Committee

meeting on June 14, dismissed both the government's insistence that it had not been

given sufficient evidence to investigate and its demands to have key witnesses named.

"It is not necessary to name the witnesses - they must be protected; some of

them are very concerned about their safety," he said. "There is enough

written evidence to proceed."

In light of the government's response to the World Bank's discovery of misprocurement

- which included a newspaper advertisement suggesting the Bank might have a hidden

political agenda to discredit the government - the Bank's June 28 statement emphasized

the importance of cooperation in combating corruption.

"When corruption is found, the Bank needs to work vigorously with the Government

to take appropriate actions, so that development assistance ultimately benefits the

poor who are its intended beneficiaries," said World Bank President Paul Wolfowitz

in the statement.

Ian Porter, Country Director of the World Bank in Cambodia, agreed that cooperation

was essential so that Cambodia's population might continue to see improvements in

their standard of living.

"It is important that we work with the government to fix the weaknesses affecting

these projects, so that we can get back to the business of helping to ensure that

people have secure property rights, that roads are built, that more people have access

to clean water," he said in the Bank's statement.

And despite the, at times, confrontational response from the government, the Bank

emphasised that such co-operation has been forthcoming.

"The government is now working with the Bank to fix the problems of the past

and also to adopt new implementation measures to minimise future fiduciary risks,"

the statement said.

The government expressed satisfaction that the World Bank was committed to co-operation.

"The government would like to thank the World Bank," said Information Minister

Khieu Kannarith. "They said they will continue cooperation with the government."