World Bank Country Director Bert Hofman on Monday reiterated that the multilateral agency's move to blacklist seven construction firms bidding for a roads improvement program in the Philippines took “a lot of due process.”

“On the process of investigation and evaluation and sanctions of the board, most of it is on our website if you really want to see the details. It is a very long report. It went through a very careful process,” Hofman told reporters on Monday.

“It was designed by the World Bank staff but approved by our shareholders, including the Philippines. We're quite confident that a lot of process, due process, has taken place,” he added.

Hofman talked to reporters at the sidelines of the Department of Social Work and Development’s conference for the beneficiaries of the KALAHI-CIDSS, the agency's social services project that is co-financed by the World Bank.

Last week, many congressmen in the House committee on public works and highways virtually cleared the construction firms from the World Bank allegation that they colluded and rigged the bidding of road projects for the World Bank-financed National Roads Improvement and Management Program.

The House panel found that the evidence provided by the World Bank was not sufficient to substantiate its allegations.

Collusive practices

The World Bank had uncovered a major cartel involving local and international firms bidding on a Philippines roads project and 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 recently.

"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. -- with Reuters, Agence France-Presse