The China Harbour Engineering Company Limited (CHEC), the company designated to expand the Timehri airport, yesterday said that its parent company inherited a 2009 World Bank blacklisting when it took over a company in 2005 that had been sanctioned for a 2002 project in the Philippines.
“CHEC is not involved in and has never been involved in any activity that has attracted any sanctions by the World Bank. CHEC itself has never been under any investigation by the World Bank” the company yesterday told Stabroek News in a statement.
The statement was in response to an article in yesterday’s edition of the Stabroek News where AFC Chairman Khemraj Ramjattan called for the immediate termination of the contract for the company for US$138M extensions of the Cheddi Jagan International Airport, Timehri because of the debarment. The debarment had been disclosed on Monday by Jamaica’s Office of the Contractor General (OCG) which had raised serious concerns about projects that CHEC is undertaking in Jamaica.
The OCG discovered that CHEC’s parent company, China Communications Construction Company (CCCC) and, by extension, CHEC, have been blacklisted, since January 2009, by the World Bank, under the Bank’s ‘Fraud and Corruption Sanctioning Policy’.
Ramjattan told Stabroek News that in the light of the revelations, “That contract must be rescinded immediately! It has always been typical of this government to give contractors who are not capable contracts. The continuity has been the hampering the Public Tendering Process but they don’t seem to care… In view of this we will make the demand to have the contract withdrawn forthwith.”
A Partnership for National Unity (APNU)’s Dr Rupert Roopnaraine, who commented on the issue since neither leader David Granger nor Shadow Finance Minister Carl Greenidge could be reached for comment, said if the Jamaica reports are true APNU will move to have the contract pulled. “If they are blacklisted by the World Bank why are we engaging them? We should not be engaging them it’s that simple. A lot of these contracts and those signed shortly before the election need to be revisited and we will move to have them revisited,” he said.
CHEC explained in the statement that its parent company, China Communications Construction Company (CCCC), took over another company –The China Road and Bridge Corporation (CRBC), in 2005 and it was that company which was blacklisted. The CRBC debarment came, it said, in 2002, three years before they took it over. The project was abolished by the Philippines Government in 2006 “due to disputes between that Government and the World Bank” CHEC said.
“This is not a new matter. The issue raised…was inherited by the CCCC when it took over China Road and Bridge Corporation (CRBC) in 2005. It dates back to 2002 and relates to CRBC, which was invited by the Government of the Philippines to bid for a World Bank funded road project.”
After the World Bank announcement of the debarring of the company in 2009 CHEC said that its parent company, maintaining that the allegations against it had no factual merit, initiated discussions with them “to arrive at a resolution of the issue.” They then submitted a full statement on the issue to the Hong Kong Stock Exchange .
In 2011 the blacklisting was solidified and the World Bank, CHEC said, explained to them that “successor organizations would be subject to the same sanctions applied to the original firm” the company said.
The company denied any wrongdoing, saying “CHEC operates successfully worldwide in accordance with the laws and regulations of countries and maintains the highest ethical standards of integrity and corporate governance.”
Several efforts to contact Minister of Public Works, Robeson Benn, on the blacklisting failed as he was at Cabinet.
The World Bank’s website list of Debarred & Cross-Debarred Firms & Individuals of China lists CCCC as debarred. Its Ineligibility Period is given from the 12-JAN-2009 to 12-JAN-2017 with the following notation:- “Pursuant to Section 9.05 of the Sanctions Procedures, the ineligibility of China Road and Bridge Corp. applies to China Communications Construction Company Limited as the successor … of China Road and Bridge Corp., in respect of contracts under a World Bank Group-financed or -executed project related to roads and bridges and extends to any firm directly or indirectly controlled by China Communications Construction Company Limited in respect of such contracts. The period of ineligibility may be reduced by up to three years if, after five years from the date of ineligibility, the Sanctions Board determines that China Communications Construction Company Limited has put in place an effective corporate compliance program acceptable to the World Bank and has implemented this program in a manner satisfactory to the World Bank.”
