The World Bank defended Friday its decision to sanction four Chinese companies, three Filipino firms and a Filipino business owner for collusive practices over a road project in the Philippines, adding that iT followed the proper administrative procedures for the action.

The bank said all respondents in the case received the notice of sanctions proceedings in May 2008 and were given 90 days to defend and contest the allegations against them. It said the companies were also offered the opportunity to request a hearing before the bank’s Sanctions Board.

An in-depth inquiry conducted by the bank's investigation unit, the Integrity Vice Presidency, 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 (NRIMP-1) financed by a $150 million loan from the World Bank.

It said the Integrity Vice Presidency unit has shared its investigative reports with the Philippines and China, adding that a copy of the report was given to the Philippines' Department of Finance and the Office of the Ombudsman as early as 2008.

"We trust that the national authorities will look closely at these reports and take the necessary steps from here. It is dependent on the national legal framework in each country to judge whether legal proceedings in the country are warranted," it said.

The four Chinese firms were identified as China Road and Bridge Corp., China State Construction Corp., China Wu Yi Co. Ltd., and China Geo-Engineering Corp. while the Filipino companies involved were E. C. de Luna Construction Corp. and Eduardo C. de Luna, owner and sole proprietor of the firm, Cavite Ideal International Construction and Development Corp. and CM Pancho Construction, Inc.

These companies were barred for alleged collusive practices in the bidding for two road contracts under phase one of the National Roads Improvement and Management Program.

"The Sanctions Board took all of their submissions into account in making their decision," the bank said.

However, the bank clarified that its sanctions regime is an administrative process, and not a criminal one.

Blacklisted firms deny corruption

Last Wednesday representatives of the seven construction firms blacklisted by the World Bank denied that they colluded to rig the bidding for several road projects.

"It is an arbitrary and unjust action on the part of the World Bank. It's a unilateral action that causes premature judgment...Isa lang akong maliit na Pilipino. Wala po akong kakayahang makibaka sa higanteng World Bank," said Eduardo de Luna, president of E.C. De Luna Construction Corp., one of three Filipino firms blacklisted by the bank.

"I beg the WB to give me my day in court," De Luna added.

"We deny the allegation of the World Bank. The bank only based its report on a confidential witness. Hindi man lang kami binigyan ng pagkakataon na makapagsalita laban sa nagbibintang samin," said Lamberto Lee Jr., president of Cavite Ideal International Construction and Dev't Corporation or CavDeal.

"We are not knowledgeable of any bid rigging or corruption that happened in this alleged report of the WB. We totally deny this," said Conrado Donato, representative of the China State Construction Engineering Corp..

"They have publicly accused me of taking part in a collusion among contractors without a transparent and fair process. It is arrogance on the part of the financial giant. I have not received a single centavo from the World Bank. Ni singkong duling ay hindi ako kumita sa kanila," de Luna added.

"We are asking for a verification so we can confront those alleged anonymous letters. Di kami pinagbigyan ng WB. Not one of them testified on personal account. WB condemned me on the basis of what legal experts would say is multiple hearsay," de Luna said.

Solons support blacklisted contractors

In a show of support, several congressmen questioned the WB decision and the move by the Department of Public Works and Highways (DPWH) last January 20 to suspend the contractors for 15 days.

A former contractor himself, Pampanga Rep. Aurelio Gonzalez, a civil engineer, sympathized with the blacklisted contractors. During his time, Gonzalez said agents from the National Bureau of Investigation closely watched the companies during the bidding. 

“You cannot rig the bids like what engineers and contractors did before. I am not siding with the contractors or with the DPWH. But the families' reputations are already stained. Their neighbors will think that they are thieves. I know what they feel,” Gonzalez said.

Minority leader San Juan Rep. Ronaldo Zamora questioned DPWH Secretary Hermogenes Ebdane Jr. for  the agency’s decision to suspend the contractors.

“You have sanctioned these contractors without investigation? Are you suspending them because of the WB sanction alone?,” he said.

When he announced the suspension on January 20, Ebdane said the decision reinforces the agency’s fight against corruption.

He said it will also allow time for the Office of the Ombudsman to finish its investigation of the allegations. But Edbdane admitted, “We have no personal knowledge with what transpired during the investigation.”

“The department should always observe basic rules of evidence, notice, and hearing. Wag magdisposiyon agad na di pinakikinggan yung tatamaan. I hope the department would come out with clearly-stated rules,” Zamora added.  With a report from Carmela Fonbuena, abs-cbnNEWS.com/Newsbreak