Manila to Probe Corruption in Road Deal

The bank's vice president, Jim Adams, said in a statement from Washington on Monday that the lender had rejected two large road contracts between 2003 and 2006 "because of strong signs of collusion and excessive pricing" linked to government procurement.

The contracts are part of the national roads improvement and management program, which is partly financed by the World Bank and which Adams described as the country's main tool for modernizing infrastructure.

He said bank and government officials have developed "stringent anti-corruption measures" to address anomalies in the bidding process, but that the second phase of the project will remain on hold "until the government and the board members receive the information they have requested."

World Bank spokesman Peter Stephens told The Associated Press that he expects the board to discuss the projects again in the next few weeks because it wants "to be sure that all of the safeguards and precautions are in place."

President Gloria Macapagal Arroyo and top Cabinet members were attending a summit of Southeast Asian leaders in Singapore and did not comment immediately.

Her Cabinet secretary, Ricardo Saludo, said the government was committed to curbing corruption and was working with the World Bank to address the issues of transparency in all projects.

"We expect that anti-graft agencies will look into and act on any solid evidence of corruption," he said.

Arroyo has been struggling to shake off the image of a graft-ridden administration amid several corruption scandals.

She has canceled a $330 million broadband contract with China's telecommunications company after a Senate hearing implicated Elections Commission Chairman Benjamin Abalos as a broker in the allegedly overpriced deal, as well as Arroyo's husband who has been accused of pocketing kickbacks.

Abalos later resigned, and Arroyo's husband has denied any wrongdoing.

In a speech recently, Arroyo said corruption was no longer "a problem within the system, it may have become the system itself."