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World Bank bars three companies and former executive for collusion

The World Bank Thursday debarred three companies and a former executive for rigging bids and fixing prices on contracts under a bank-financed project in Pakistan.

Pak Elektron Limited (PEL) and two affiliates were debarred for 33 months for colluding on bids for the Electricity Distribution and Transmission Improvement Project. The project involved the development of electricity distribution and transmission networks.

Also debarred for 33 months was PEL’s former general manager, Abdul Waheed Butt.

Butt chaired a trade group that PEL was a member of. The group colluded so that each member “received a pre-determined share of five World Bank-financed contracts,” the bank said.

Members of the group also set the prices that would be quoted in different World Bank-financed tenders.

Butt “presided over meetings that discussed and allocated to members of the group two of the five Bank-financed contracts affected by the scheme,” the World Bank said.

“Under World Bank procurement guidelines, these actions constitute collusive practices,” the bank said.

PEL and its two affiliates — PEL Marketing (Private) Limited and Kohinoor Power Company Limited — are based in Lahore. They manufacture electrical appliances.

In a negotiated resolution, the companies and Butt didn’t contest the World Bank findings.

The World Bank said the settlements “provide for reduced periods of debarment in light of Mr. Butt’s and the companies’ cooperation and voluntary remedial actions.”

The debarments qualify for cross-debarment by other multilateral development banks.

In addition to the World Bank, parties to the 2010 cross-debarment agreement are 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.

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