On November 23, last year, I submitted the results of an investigation into the business practices of the China Communications Construction Company, known as CCCC, the parent company of China Harbour Engineering Company, known as CHEC.
In that piece, I adverted to the reaction of the then Jagdeo administration to the disclosure of the details of this deal in the Jamaican press, the deep secrecy with which this deal was concluded by the PPP government, and that despite its vehement declarations in the past that the PPP government/Cabinet does not approve contracts, that it had in fact done so, and that, without subjecting this deal to either parliamentary scrutiny or the tender process.
I am submitting the same piece with minor modifications in the hope that it will appear in your letters column.
Guyanese need to know that the China Communications Construction Company, the parent company of China Harbour Engineering Company has had a checkered history, particularly in its dealings with projects in developing countries as these two examples illustrate.
On January 12, 2009 the China Road and Bridge Company, a subsidiary of China Communications Construction Company was debarred by the World Bank for a period of eight years from participating in any project financed by that institution.
This unprecedented action was taken based on the World Bank’s Integrity Vice Presidency investigation of the Philippines National Roads Improvement and Management Project, Phase I case.
The World Bank Sanctions Board made up of senior bank officials and external legal experts decided that the entities had participated in a collusive scheme designed to establish bid prices at artificial non-competitive levels and to deprive the borrowers of the benefits of free and open competition.
The World Bank found that this scheme constituted fraudulent practices under the rules applying to the Philippines National Roads Improvement and Management Project, Phase I.
As a result of the foregoing, the World Bank recently clarified its sanctions regime to ensure that successor organizations–through purchase or reorganization–will be subject to the same sanctions applied to the original firm.
The World Bank sanctions regime applies to both parent and subsidiary companies.
During 2010 the Uganda National Road Authority invited tenders to the design and construction of the Mbarana-Khagati-Murongo Road. Tenders were received from the China Road and Bridge Company, another subsidiary of China Communications Construction Company, and Hawk International Financial and Construction Co. Ltd.
China Road and Bridge Company was awarded the contract by the Uganda National Roads Authority.
Hawk International appealed the award of this contract, and the Uganda Public Procurement and Disposal of Assets Authority which entertained this appeal found sufficient grounds to reverse the decision Uganda National Road Authority and award the contract to Hawk International.
It is of interest to note that Hawk International’s bid was 86.8 billion Uganda shillings, while China Road and Bridge Company’s bid was 134.6 billion shillings, a difference of some 47.9 billion Uganda shillings.
Mr Edgar Agaba, head of the Uganda Public Procurement and Disposal of Assets Authority discovered inconsistencies in the technical evaluation process and was concerned about price differences between China Communications Construction Company and Hawk International.
He stated that his review was carried out with a view to ensuring value for money in the procuring process.
Regarding these and similar practices, James Adams, World Bank Vice President for East Asia noted, “Misuse of public money is a problem for everyone. It deprives the poorest people of the development funds that are so vitally needed, and it undermines public confidence in public and private institutions”.
Perceptive Guyanese presented with the fiat accompli of the Cheddi Jagan International Airport project and the apparent lack of due diligence by the relevant authorities, are not surprised because what they see here conforms to a pattern of loose and irresponsible dealings that have characterized the tenure of the PPP administration.
F. A. Stephenson
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