President Arroyo on Thursday has ordered an investigation into a World Bank (WB) report of corruption involving local and international firms bidding on a Philippines roads project financed by the global development agency while the Philippines public works and highways department immediately suspended the three local firms identified in the report.

Deputy presidential spokesperson Anthony Golez said that Mrs. Arroyo has ordered her Cabinet to also “review all WB-funded projects, to verify allegations of corruption made by the multilateral agency.”

He said President Arroyo is taking seriously the WB’s move to suspend the three Philippine firs for alleged involvement in cartel practices in the bidding for the National Roads Improvement and Management Program.

"This is going to be discussed at the Cabinet level to look into the corruption allegations, and make sure that we can put a stop to this and we will file appropriate charges to people who will be found guilty " Golez said. He said the issue will be further discussed in the next Cabinet meeting on Tuesday.

Collusive practices
The WB said on Wednesday it had uncovered a major cartel involving local and international firms bidding on a Philippines roads project and it had barred seven companies -- three from the Philippines and four from China -- from bidding on its projects due to alleged corruption.

The WB's corruption-fighting unit said the firms were blacklisted for "engaging in collusive practices" during the bidding of the project financed by the Washington global development lender.

Investigation by the bank "uncovered evidence of a major cartel involving local and international firms bidding on contracts under phase one of the Philippines National Roads Improvement and Management Program, known as NRIMP 1," the bank said in a statement.

"As a result of swift action when suspicions of collusion in the bidding process were raised by the project team, the World Bank stopped an estimated $33 million from being awarded," WB said in a statement. It said no funds were disbursed to any of the firms.

WB listed the companies as:

- Philippines-based E.C. de Luna Construction Corp. and its owner Eduardo de Luna, were barred permanently, the strongest possible sanction and the first since 2004.
- China Road and Bridge Corp was barred for eight years.
- China State Construction Corp and China Wu Yi Co Ltd were each barred for six years.
- China Geo-Engineering Corp was barred for five years.
- Philippines Cavite Ideal International Construction and Development Corp. and CM Pancho Construction, Inc. were each barred for four years.
- Korean firm Dongsung Construction Co. Ltd was separately sanctioned in August 2008 for four years for fraud and corruption related to the Philippines National Roads Improvement and Management Program.

The WB probe "closely analyzed the procurement process the firms participated in and conducted numerous interviews before closing the investigations and initiating sanctions proceedings against the entities," it said.

DPWH suspends three RP firms
A senior member of Arroyo’s Cabinet meanwhile announced on Thursday that following the WB action, the three RP firms were temporarily suspended from participating in any bidding for locally-funded or foreign-assisted projects of the Department of Public Works and Highways (DPWH).

“The DPWH will make a decision whether to pursue blacklisting procedures against these companies within 15 days. The Office of the Ombudsman is also set to complete its fact-finding investigation on public officials alleged to be involved in the World Bank road project by the first week of February, said Budget and Management Secretary Rolando Andaya Jr. in a statement.

He said the Arroyo administration remains “committed in the fight against corruption in government procurement and recent efforts have already paved the way for the approval of new World Bank loan for roads improvement."