The World Bank Monday debarred a railroad company based in Kenya for trying to “improperly influence the customs and port clearance process” on two projects.
Africa Railways Logistics Limited was debarred for two years.
It was importing locomotives that were part of two investment projects by the International Finance Corporation (IFC), the private-sector arm of the World Bank Group.
Monday’s action was the first debarment related to an IFC investment, the World Bank said.
Africa Railways is ineligible to participate in World Bank Group-financed projects during the debarment.
The company acknowledged responsibility for the “underlying sanctionable practices” under a settlement agreement with the bank.
Two related companies — Africa Railways Limited and Rift Valley Railways Kenya Limited — were sanctioned with “conditional non-debarment.”
That means they can participate in World Bank-financed projects as long as they comply with their obligations under the settlement agreement. If they don’t comply, they’ll be ineligible for the projects.
The two IFC investments involved in Monday’s debarment included a loan to purchase locomotives, wagons, infrastructure, and cover other costs associated with railway concessions in Kenya and Uganda.
An employee of Africa Railways who also owned a subcontracted company didn’t disclose his ownership interest in the subcontractor. He also tried to “improperly influence the customs and port clearance process for the locomotives, which is a corrupt practice,” the World Bank said.
The employee was disciplined and fired, the bank said.
Africa Railways cooperated with the World Bank and took voluntary remedial actions, the bank said.
The company’s two-year debarment qualifies for cross-debarment by the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank, and the African Development Bank.
A list of all World Bank debarred entities and individuals is here.
Richard L. Cassin is the publisher and editor of the FCPA Blog.
The World Bank Monday debarred a railroad company based in Kenya for trying to "improperly influence the customs and port clearance process" on two projects.
Does the World Bank not provide for financial penalties or other forms of punishments for those involved?
Clarification will be appreciated as debarring by name may not be effective as the people involved can also set up another company with a different name.
As an example about four decades ago two Malaysian registered companies were banned from Govt Projects but later were awarded public funded projects under different company names thought the people were same.
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