China construction giant debarred by World Bank for ‘fraudulent practices’

A large construction firm from China was debarred from bidding for World Bank projects following “fraudulent practices” in a major Philippines road improvement project. The World Bank has blacklisted China Communications Construction Company Ltd until January 2017.

See an extract from a World Bank statement here:

Washington, July 29, 2011 − The World Bank today announced the debarment of China Communications Construction Company (CCCC) Limited, and all its subsidiaries, for fraudulent practices under Phase 1 of the Philippines National Roads Improvement and Management Project. Under the sanction, CCCC is ineligible to engage in any road and bridge projects financed by the World Bank Group until January 12, 2017. This action is based on recent changes in the World Bank sanctions system to clarify that successor organizations – through purchase or reorganization – will be subject to the same sanctions applied to the original firm.

CCCC is the designated successor entity to China Road and Bridge Corporation (CRBC) which, along with six other firms and one individual, was debarred by the World Bank for eight years, beginning January 12, 2009, following an investigation of the National Roads Improvement and Management Project by the World Bank’s Integrity Vice Presidency (INT). No World Bank funds from the NRIMP project were disbursed to any of the sanctioned firms.

The Sydney Morning Herald reports:

In July 2011, CCCC was prohibited from working on World Bank road and bridge projects because it was a successor to another Chinese firm, the China Road and Bridge Corporation (CRBC) that was banned in January 2009. CRBC became a wholly-owned subsidiary of CCCC following a corporate restructuring in 2005.

CRBC was one of six Chinese firms the World Bank barred for allegedly colluding in bidding for road projects in the Philippines.

CCCC claims the World Banks allegation against CRBC has no “factual or legal merit”.

[This company, CCCC, sounds familiar. The Malaysian Insider recently reported that a company bearing the same name had won a major private infrastructure project for land reclamation in Penang. Is this the same company?]

[In the case of the second Penang bridge project, an earlier report said another China firm, Beijing-based China Harbour Engineering Co Ltd (CHEC), had won the main contract for the first package of the second bridge, which included the bridge and foundation work.

CHEC is actually a subsidiary of China Communications Construction Company Ltd (CCCC). But CHEC has dismissed allegations that it is linked to the World Bank blacklist of CCCC. Of course, none of these projects in Penang are World Bank-funded.]

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In another case, Reuters reported in October 2013 that China’s anti-graft authorities punished eight people  at a state-owned rail construction firm,  China Railway Construction Corp. Ltd, for spending more than $100m on ‘hospitality’ in 2012. They had spent $135m on receptions for guests. One of the officials received a suspended death sentence, meaning life imprisonment.

[The company sounds familiar. In March 2013, a company bearing the name China Railway Construction Corporation International signed an agrement with the Penang state government on behalf of the consortium that won the bid for the Penang tunnel and highways project. Is this the same company? (Firms from China were also linked to the other bidders.)

The tunnel developer, Zenith Consortium, says, “CRCC (one of China’s largest overseas engineering contractor) is its Engineering Procurement & Construction (EPC) Contractor.” Is this the same CRCC?]