"China State Construction Engineering Corporation (CSCEC) deeply regrets that the World Bank has rejected our explanation and confirmed our disbarment," said a statement sent by the corporation to China Business News on Thursday.
The statement maintained CSCEC had made complete and accurate disclosure to the World Bank's charges and clarified the issues involved in the bidding process for a roads project in the Philippines. However, the WB has rejected CSCEC's submissions and confirmed its decision of debarment.
In a written statement Xiao Hong, spokesman for CSCEC overseas development department, said that the company requires all its overseas branches and their employees, including its Philippine branch, to abide consistently by the company's rules and by local laws and regulations in business operations. He added that the company opposes any fraudulent and corrupt practice.
Four Chinese companies have been disbarred from bidding for World Bank financed projects for periods ranging from five to eight years after a corruption investigation in the Philippines, according to a World Bank press release on January 14.
The companies, China State Construction Engineering Corporation, China Road and Bridge Corporation, China Wuyi Co. Ltd., and China Geo-Engineering Corp., were among seven firms and one individual disbarred for "engaging in collusive practices under a major Bank-financed roads project in the Philippines", according to the press statement.
The project, the Philippines National Roads Improvement and Management Program, was partly financed by a US$150 million loan from the World Bank.
A source from one of the four Chinese companies said they would continue current contracted World Bank projects, but that future tenders would be affected. He admitted that the disbarment had impaired the company's reputation.
Leonard McCarthy, World Bank Integrity Vice-President, was quoted in the press statement as saying: "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. As the World Bank Group continues to ramp up its anti-corruption work, INT will remain vigilant in investigating allegations and holding wrongdoers accountable."
A Philippine company, EC De Luna Construction Corp., and its owner Eduardo le Luna, were permanently disbarred from bidding for World Bank projects, the strongest possible sanction applied by the Bank. Another two companies, Cavite Ideal International Construction and Development Corp. and CM Pancho Construction, Inc. were each disbarred for four years.
Korean company Dongsung Construction had already been disbarred in August 2008 for four years for fraudulent and corrupt practices in relation to the same case.
"Misuse of public money is a problem for everyone... This case shows our processes working as they should: we detected the possibility of collusion early, we took action to investigate, we worked with the Government of the Philippines to strengthen anti-corruption controls in the next phase of the project and after an extensive and fair process, we have sanctioned the parties involved," said James Adams, World Bank Vice President for East Asia.
(China.org.cn by Huang Shan, January 16, 2009)