Global Fund to review India projects for fraud

School children make an AIDS logo at a school in Chandigarh in this November 29, 2006 file photo. The Global Fund to Fight AIDS, Tuberculosis and Malaria is reviewing its India operations after the World Bank said it found signs of widespread corruption in its own India projects, the Fund's regional head said on Friday.

NEW DELHI (Reuters) - The Global Fund to Fight AIDS, Tuberculosis and Malaria is reviewing its India operations after the World Bank said it found signs of widespread corruption in its own India projects, the Fund's regional head said on Friday.

The Fund says it has no evidence right now that any of the more than $170 million it has handed to India since 2003 has been lost to fraud.

But Taufiqur Rahman, the Fund's head of grants in South and West Asia, says an urgent, in-depth inquiry was vital in the light of the World Bank's report last month.

That report found that, in some projects, close to 90 percent of contracts involving Bank funds in India showed signs of fraud.

"It's important for us to take the findings of the World Bank seriously," Rahman told Reuters by telephone from the Fund's Geneva headquarters.

"It's a review just to make sure, given the World Bank report, that our investments are protected. "I was surprised (by the report) because we didn't know the scale of it."

But some development workers have told Reuters the report only confirmed their own experiences -- that blatant corruption continues to hinder India's efforts to prevent people dying from tuberculosis, malaria and other diseases.

Rahman says the Fund has never seen evidence of fraud in its Indian operations, where it funds testing and treatment programmes. The worst he has heard is complaints that getting hold of promised funds can be slow.

The World Bank earlier acted as an agent for Global Fund money, but the two institutions now work independently in India. Rahman hopes the review, which will be conducted by PriceWaterhouseCoopers, will begin next week.

"It's a priority for us," he said. "We'll move rapidly on this one ... If there's any hint of corruption the Global Fund comes down very hard."

The Global Fund says it provides two-thirds of international funding to fight malaria and tuberculosis.

India's government is examining the World Bank's report and says it will punish people who broke the law. It is the fourth report done by or for the Bank since 2005 to have found signs of corruption in India.

Rahman was asked if he expected the Fund's review would uncover similar signs of fraud.

"We don't want to get into a situation where we're making assumptions, that's not fair to the country," he said.