Sep 27, 2022 News
– accused of bribing officials, falsifying documents and fraudulent practices
By Kiana Wilburg
Kaieteur News – Three Chinese firms competing to build Guyana’s Natural Gas Fired Power Plant at Wales, West Bank Demerara (WBD) have a well documented history of fraudulent activities. The companies which are bidding against two other entities are: China Energy Int’l Gr. Co Ltd., China Machinery Engineering Inc., and Power China Int’l Group Ltd.
In the case of China Energy Engineering Group (a company that is 62.58%-owned by China Energy Engineering Group Co., Ltd.) was blacklisted by the World Bank on September 11, 2019. The financial institution had imposed a 20-month debarment of the Chinese state-owned enterprise, known at the time as China Energy Engineering Group Hunan Electric Power Design Institute Co., Ltd (CEEC-HEPDI).
It had provided engineering and construction services, in connection with fraud as part of a Lusaka Transmission and Distribution Rehabilitation Project in the Republic of Zambia. The debarment made CEEC-HEPDI ineligible to participate in World Bank-financed projects. It was part of a settlement agreement under which the company acknowledged responsibility for underlying sanctionable practices and agreed to meet specified corporate compliance conditions as a condition for release from debarment.
The project was designed to increase the capacity and improve the reliability of the electricity transmission and distribution system in the African State. According to the facts of the case, the World Bank said, “CEEC-HEPDI knowingly and fraudulently falsified documentation describing past contract experience, litigation history, and business credentials to meet the requirements of the bidding documents.” It had won the contract due to the deceptive documents.
In a separate case, the Anti-Corruption Commission of Zambia later arrested its former Secretary to the Treasury Fredson Yamba for corrupt practices involving another project. His arrest took place in May this year.
It was found that in 2018, Yamba did not follow the procedure when he authorized an advance payment of US$33,750,000.00 to China Energy Engineering Group – Hunan Electric Power Design Institute Co. Ltd for the construction of FTJ Chiluba University in Mansa and Kasama under the Ministry of Higher Education. The said money was paid to the contractor but to date no university has been constructed.
In the same matter, the ACC also arrested Joseph Phiri, an architect at the Ministry of Higher Education, for attempting to fraudulently facilitate a payment amounting to US$ 29,186,169.09 to China Energy Engineering Group–Hunan Electric Power Design Institute Co. Ltd.
Kaieteur News understands that Phiri, being an Architect at the Ministry of General Education and Project Manager for the construction of FTJ Chiluba University in Mansa and Kasama, in 2018, did attempt to fraudulently facilitate payment to China Energy Engineering Group–Hunan Electric Power Design Institute Co. Ltd by signing and issuing an Interim Payment Certificate No. 2 valued at US$ 29,186,169.09 with an inflated sum of US$7,578,772.41 for goods purportedly supplied when in fact not.
CHINA MACHINERY ENGINEERING CORPORATION (CMEC)
In July 2018, the World Bank had also blacklisted China Machinery Industry Construction Group, Inc. and another company for fraudulent practices.
The World Bank Group had said that the two-year debarment of Shanghai-based China Nuclear Industry Fifth Construction Co., Ltd. (CNF), an infrastructure construction company that provides power and electrical engineering services, and the four-year debarment of China Machinery Industry Construction Group, Inc. (China Machinery), a construction company, was based on deceptive practices pertaining to the Shandong Energy Efficiency Project in China.
That project was designed to improve energy efficiency in selected enterprises, particularly in the industrial sector of the Shandong Province, and increase the use of biomass for power and heat generation.
According to the facts of the case, CNF and its sub-contractors, hoping to receive advance payments, falsified documents that certified aspects of the project were completed and had met quality standards. China Machinery also sought to receive advance payment by misrepresenting in falsified documents that work had been completed. This is a fraudulent practice under World Bank Group procurement guidelines. As such, both CNF and China Machinery were sanctioned.
POWER CHINA INT’L GROUP LTD.
Not to be left out, the World Bank Group in June 2021 had also announced a two-year debarment of China-based Zhejiang First Hydro and Power Construction Group Co. in connection with fraudulent and corrupt practices under the Guangxi Laibin Water Environment Project in China. That project is worth US$127M and is designed to reduce flood risks and improve drainage in selected areas.
The World Bank said Zhejiang First Hydro’s de facto agent and subcontractor offered and paid bribes to two government officials in exchange for a contract.
The company also misrepresented its intent to mobilise the resources required to implement the contract as well as the availability of experts proposed in its bid. The bank said these were corrupt and fraudulent practices, respectively.
The debarment period was significantly reduced in light of what the bank said was Zhejiang First Hydro’s “extraordinary cooperation and voluntary remedial actions”.
As a condition for release from sanction under the terms of the settlement agreement, Zhejiang First Hydro committed to undertake integrity compliance programmes and to continue to cooperate with the World Bank Group Integrity Vice Presidency.
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