Filtered By: Topstories
News

World Bank blacklists 7 bid riggers


MANILA, Philippines - The World Bank has blacklisted seven Filipino and Chinese construction firms and an individual after finding that they had rigged bids for local road projects funded by the multilateral agency. Following the World Bank’s move, Budget Secretary Rolando G. Andaya, Jr. announced that the government had also decided to bar the firms, although temporarily, from entering into public works contracts. The Washington-based lender said it had debarred E.C. de Luna Construction Corp. and its owner Eduardo C. de Luna, Cavite Ideal International Construction and Development Corp., CM Pancho Construction Inc., and Chinese construction firms China State Construction Corp., China Wu Yi Co. Ltd. and China Geo-Engineering Corp. This means they can no longer bid for World Bank projects. Representatives of the firms involved and Mr. de Luna were not available for comment. Investigations by the bank’s Integrity Vice Presidency (INT) revealed that the construction firms were involved in a "major cartel" when they submitted bids for the first phase of the National Roads Improvement and Management Program or NRIMP 1. The World Bank said the INT, responsible for investigating allegations of fraud and corruption in World Bank-financed operations, analyzed the procurement processes where the firms had participated in and conducted numerous interviews. As a result, the firms were prevented from getting hold of $33 million in contracts. "This is one of our most important and far-reaching cases, and it highlights the effectiveness of the World Bank’s investigative and sanctions process," World Bank Vice-President Leonard McCarthy said in a statement. "As the World Bank Group continues to ramp up its anti-corruption work, INT will remain vigilant in investigating allegations and holding wrongdoers accountable." The World Bank imposed a permanent ban on E.C. de Luna Construction and Mr. de Luna, the first time the sanction was issued since 2004. It also prohibited China Road and Bridge Corp. to bid for its projects for eight years, but this could be reduced or terminated after five years if the firms establish a compliance program that will satisfy the World Bank. Chinese construction firms China State Construction and China Wu Yi were barred for six years but this could be reduced or lifted after four years, also upon implementation of a compliance program. China Geo-Engineering, also based in China, was barred for five years. Cavite Ideal and CM Pancho Construction were prohibited from participating in biddings for World Bank-financed programs for four years, but the sanctions will also be reduced or lifted once they submit compliance programs. In August, the World Bank put South Korea’s Dongsung Construction Co. Ltd. on its blacklist for "fraudulent and corrupt practices," also in relation to the NRIMP 1 case. Dongsung was prohibited to bid for World Bank projects for four years. It did not contest the accusations brought against it. The NRIMP, intended to help improve the country’s road network, was partially financed by a $150-million loan from the World Bank in 2000. It was also aimed at addressing weaknesses in managing the road projects. Under the NRIMP 1, which ended in March 2007, 1,400 kilometers of roads were built or rehabilitated while the management of funds for roads held by the Department of Public Works and Highways (DPWH) was improved, the World Bank said. The NRIMP 2, now underway, was earlier estimated to cost a total of $576.02 million. The second phase aims to establish systems to manage the country’s road system. Mr. Andaya, who is head of the Government Procurement Policy Board, told a news conference that the Department of Public Works and Highways (DPWH) had decided to temporarily bar the firms named by the World Bank from bidding for government projects. "The DPWH will make a decision whether to pursue blacklisting procedures against these companies within 15 days," he said. "The Office of the Ombudsman is also set to complete its fact-finding investigation on public officials involved in the World Bank road project by the first week of February." Mr. Andaya said the DPWH investigation would concentrate on companies that had committed irregularities while the Ombudsman would deal with public officials who may have connived with the firms. "[B]ut we will give them a chance to be heard and to air their side," he said. The budget chief said the government has been undertaking measures to improve the country’s procurement system, including the appointment of internal auditors, procurement advisers and civil society representatives to oversee bidding processes. — G.S. de la Peña and A.D.B. Romero, BusinessWorld
LOADING CONTENT