WASHINGTON, June 21: The Karnataka Government has salvaged ties with the World Bank, badly damaged over the last decade because of what the latter saw as a series of infractions by the state.

Chief Minister J H Patel on Thursday met with senior World Bank officials, including Meiko Nishumizu, bank's vice-president for South Asia, and suggested bygones be bygones as he sought the agency's aid for the state's infrastructure problems in areas of power, roads, ports, etc.

After obtaining some clarification and commitments from the state government regarding the Upper Krishna Project, bank officials promised to consider the request and told the Chief Minister that the bank's New Delhi representative would visit Bangalore for discussions.

The latest provocation by Karnataka in the eyes of the Bank -- in a lengthy catalogue of complaints -- was its tardy implementation of the rehabilitation and reconstruction (R&R in banking jargon) of the populace displaced by the Upper Krishna Project. The bank had twice stalled funding because of what it felt was the state's lack of commitment to R&R.

More recently, the bank has been more sanguine about the state government's efforts, particularly after the R&R pace picked up under the supervision of S.M. Jamdar, an upright officer who was posted there by then Chief Minister H.D. Deve Gowda for this explicit purpose. In fact, bank officials went to the extraordinary and unprecedented lengths of requesting the Chief Minister to retain Jamdar in the post, a wish Patel acceeded to and said he would strengthen the officer's hands.

The end result is bank officials indicated that they may offer an IDA credit -- perhaps in the region of Rs 150 to Rs 200 crore -- for UKP's R & R programme, although bank funding for the overall project ends on June 30. The World Bank has provided upward of Rs 600 crore to UKP so far. The IDA loans are low-interest, long-term `gimmes'.

Ties between the World Bank and the Karnataka Government had soured in the late 80s and early 90s because of several misunderstandings. In one case, the bank cancelled a power project funding because it felt the state government did not honour a legal covenant. In another case, bank officials were miffed when a chief secretary told them the bank was undermining Karnataka's food security in a case where the former was funding a Karnataka agricultural development project.

The ``repair job'' was begun by then Chief Minister H. D. Deve Gowda -- and the visit to India of World Bank President James Wolfensohn -- and accelerated during his stint as the Prime Minister. Patel appears to have brought it to closure. State government officials said they were happy with the outcome of the talks and felt things were back on keen. While Karnataka had been virtually blacklisted by the bank, other states like Orissa, Maharashtra and Andhra Pradesh had secured loans and technical expertise worth millions of dollars. Meanwhile, the same Karnataka delegation continued to make a meal of its ``foreign investment promotion'' trip with bad planning and poor presentation. At a meeting with the US-India Business Council on Thursday evening, the Chief Minister and his entourage did not come up with a single new idea or proposal and instead restated the shopworn political discourse about India's great march to an economic miracle.

The casual approach of the delegation flowed from the Chief Minister himself -- who incidentally looked in much better shape today -- who came up with his familiar wisecracks.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.