(Update) World Bank blacklists 3 RP firms over graft claim
Reuters, Agence France Presse | 01/15/2009 11:19 AM
Printer-friendly version | 
Send to friend | 
Share your views
WASHINGTON - The World Bank 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 World Bank'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," the World Bank said in a statement. It said no funds were disbursed to any of the firms.
It 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 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.
"This is one of our most important and far-reaching cases, and it highlights the effectiveness of the World Bank’s investigative and sanctions process," said Leonard McCarthy, World Bank vice president for integrity.
"As the World Bank Group continues to ramp up its anti-corruption work, (it) will remain vigilant in investigating allegations and holding wrongdoers accountable," he said.
The sanctioning of the firms by the World Bank comes three days after the institution said it would publish the names of all companies involved in wrongdoing, including those that have direct contracts with the Bank.
The decision by World Bank President Robert Zoellick follows revelations that Indian IT firm Satyam Computer Services Ltd, which the Bank sanctioned in September but did not name publicly, was involved in a $1 billion corporate fraud scandal, which hit Indian stocks and the rupee currency.
On Sunday, the Bank named three companies, including Satyam, it had barred from qualifying for direct contracts with the Bank. The other firms included Wipro Technologies, India's No. 3 software company, and India's Megasoft Consultants.
"As the World Bank Group continues to ramp up its anti-corruption work, INT will remain vigilant in investigating allegations and holding wrongdoers accountable," said World Bank Integrity Vice President Leonard McCarthy, referring to the Philippines road project..
He said the World Bank was in the process of conducting a global review of the Bank's activities in the road sector in developing countries.
