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World Bank debars unit of state-owned China construction company

The World Bank debarred a Chinese engineering and construction company Wednesday for eighteen months for fraud involving a project in Zambia.

Beijing-based China Electric Design and Research Institute Co., Ltd. (CEDRI) is ineligible to participate in World Bank-financed projects during the 18-month debarment.

CEDRI is a subsidiary of the China National Electric Engineering Co., Ltd. (CNEEC), a state-owned international engineering company, which was also sanctioned Wednesday with an 18-month conditional non-debarment. CNEEC remains eligible to participate in World Bank-financed projects as long as it complies with its obligations under the settlement agreement.

The $210 million World Bank-funded project in Zambia was designed to increase capacity and improve reliability of the electricity transmission and distribution system in the Southern African nation’s capital.

CEDRI failed to disclose a conflict of interest, and presented false documents with CNEEC’s company name in order to meet the requirements of a contract under the project, which are fraudulent practices, the World Bank said.

According to the World Bank, parent company CNEEC failed to oversee CEDRI’s conduct.

As a condition of the settlement, CNEEC and CEDRI cooperated with the investigation and agreed to develop an integrity compliance program and cooperate with the World Bank Group Integrity Vice Presidency.

The debarment of CEDRI 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.

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