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World Bank announces three new debarments

The World Bank announced the debarments of Indonesian, Chinese, and Spanish companies Wednesday in three unrelated actions. 

PT. Suburo Jayana Indah Corp. (Sujainco) was debarred for two years for “fraud and collusion” on the World Bank funded Water Resources and Irrigation Sector Management Program (Phase II) project in Indonesia. 

Privately-owned Sujainco is ineligible to participate in World Bank-financed projects during the 24-month debarment.

The World Bank said Sujainco colluded with a third party to arrange for other bidders to submit artificial and non-competitive bids. That allowed Sunainco to win the contract to rehabilitate an irrigation management system in Indonesia.

Sujainco also submitted fraudulent documents to collect payments during contract.

The 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.

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Chinese state-owned construction company China Railway First Group Co. Ltd. (CRFG) was debarred for two years because of “fraudulent practices” related to the Dasu Hydropower Stage I Project in Pakistan.

According to the World Bank, CRFG engaged in multiple misrepresentations during the bidding process for four contracts, two of which it won in 2015. The Chinese company failed to disclose subcontracted work, a subcontractor, and an agent it used in bidding for one of the contracts.

“The debarment makes CRFG ineligible to bid on future World Bank Group-financed projects for the period of the debarment,” the World bank said

After a minimum debarment period of 18 months, CRFG will be eligible to have its debarment converted to a conditional non-debarment for a further minimum period of six months if it has complied with the terms of the settlement agreement.

CRFG’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.

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The World Bank also announced the one-year debarment of Spanish company Aqualia Intech S.A. (AISA) for a “fraudulent practice” in the design and construction of hydraulic infrastructure in Colombia.

AISA is ineligible to participate in World Bank-financed projects during the 24-month debarment.

In the bidding process, AISA knowingly misrepresented the composition and the roles within a consortium of three companies that would execute a World Bank-financed contract. The fraudulent practice allowed the consortium to qualify for the contract award, which it ultimately won. 

The Río Bogotá Environmental Recuperation and Flood Control Project was designed to assist the Colombian government in improving water quality, reducing flood risks, and creating multi-functional areas along the Bogotá River.

The World Bank said the consortium will continue to execute the current contract, in accordance with the Bank’s rules. 

The 12-month debarment is not eligible for cross debarment by other development banks. To be eligible for cross debarment, the duration must be more than a year.

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A list of all World Bank debarred entities and individuals is here.

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Harry Cassin is the publisher and editor of the FCPA Blog.

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