World Bank Blacklists 6 Chinese Companies Over  Corruption

World Bank Blacklists 6 Chinese Companies Over Corruption

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By Frank Kamuntu

Both the World Bank and the African Development Bank have blacklisted several Chinese companies operating in Nigeria, which the World Bank accuse of “violating the banks’ fraud and corruption policy.”

Among them are China Railway Construction (International) Nigeria Company Limited and CCECC Nigeria Railway Company Limited.

However, the Chinese Embassy in Nigeria on Monday replied to the World Bank decision by asserting that the China Civil Engineering Construction Corporation (CCECC) is not among the companies recently blacklisted by the World Bank for fraud and that the allegation to that effect is false.

But contrary to the embassy’s claims, a World Bank document issued to the media confirmed the blacklisting of China Railway Construction Corporation Limited (CRCC), the parent company of the subsidiaries in Nigeria.

This not only affected the CCECC, as named by the World Bank, but other CRCC affiliates around the word including hundreds of companies blacklisted for various infractions bordering on violations of its fraud and corruption policy in its contracting process.

The policy is contained in the bank’s Guidelines for the Procurement of Goods, Works, and Non-Consulting Services under International Bank for Reconstruction and Development (IBRD) Loans and the International Development Association (IDA) Credits & Grants by World Bank Borrowers.

The World Bank, in the report published on its website named the affected companies as China Railway Construction (International) Nigeria Company Limited (CRCINCL), and China Railway 18th Bureau Nigeria Company Limited (CR18BNCL).

Others are CCECC Nigeria Lekki FTA Company Limited, CCECC Nigeria Railway Company Limited, CRCC Petroleum & Gas Company Limited, and CCECC Nigeria Company Limited. In the publication, the World Bank not only made it clear the report was about the Chinese companies in Nigeria, it accompanied each of the listed companies with their registration numbers, and official business addresses in Nigeria.

The publication also indicated the specific procurement guidelines each company was found guilty of violating and the period the blacklisting covered.

Company Details And Offences

The World Bank gave the Registration No. of the CRCINCL as N1000201600386, with No.34, Amazon Street, Maitama, Abuja, as its business address.

CR18BNCL, with Registration No. as N1000201800131, has Plot 60, Cadastral Zone B09, Kado District, Abuja, as its official address.

For CCECC Nigeria Lekki FTA Company Limited, the bank gave its Registration No. as 0241, with business address as Lekki Free Zone, Ibeju Lekki, Lagos.

Also, CCECC Nigeria Railway Company Limited’s Registration No. was given as 679271, with business address as Plot 215 Cadastral Zone C00, Institute & Research District, Km 10, Airport Road, Abuja.

Others are CRCC Petroleum & Gas Company Limited, with Registration No 1000201300324, and business address at NO.10A, Usuma Crescent, Maitama A5, Abuja.

The Registration No of CCECC Nigeria Company Limited was given as 1000201200017, with Plot 215 Cadastral Zone C00, Institute & Research District, Km 10, Airport Road, Abuja as its official address.

All the companies were accused of violating the provisions of the Procurement Guidelines 1.16(a) (ii) bordering on the bank’s fraud and corruption policy in the procurement process.

World Bank Guidelines

The Guideline 1.16 on page 6 of the publication covers the World Bank’s policy requiring “borrowers (including beneficiaries of Bank loans), bidders, suppliers, contractors and their agents (whether declared or not), subcontractors, sub-consultants, service providers or suppliers, and any personnel thereof, (to) observe the highest standard of ethics during the procurement and execution of Bank financed contracts.”

Pursuant to this policy, Guideline 1.16(a) (ii) defines “fraudulent practice” as “any act or omission, including a misrepresentation, that knowingly or recklessly misleads, or attempts to mislead, a party to obtain a financial or other benefit or to avoid an obligation.”
The bank further defined “party” as a public official, while the terms “benefit” and “obligation” relate to the procurement process or contract execution; and the “act or omission” means “an intention to influence the procurement process or contract execution.”

All the six companies were debarred and declared ineligible to be awarded any World Bank-financed contracts for at least nine months, between June 4, 2019 and March 3, 2020.

A World Bank official in Ugand who preferred to talk on condition of anonymity said that “Te World Bank will not speak any further on the issue beyond the report on its website.”

CRCC was established in November 2007 in Beijing, China and is the parent company of the six subsidiaries in Nigeria on which it wields direct influence and control.

The six companies are very active in Nigeria, with ongoing or completed multi-billion dollar contracts for the construction of railways, highways, housing estates, airport terminals, municipal engineering, water resource, and hydro-power engineering projects for federal and state governments.

Some of the contracts include the $8.3 billion (N2.5 trillion) federal government rail modernization programme awarded in 2010 to replace the existing narrow gauge system in the country.

The construction of the 186 kilometers single standard gauge tracks of the Abuja-Kaduna Railway line and the $1.53 billion contract for the rehabilitation of the 312 kilometers double-track standard gauge Lagos-Ibadan rail line are part of that program.

Others include the rehabilitation of the airport terminals in Abuja, Lagos and Port Harcourt. .

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