AfDB debars Chinese engineering and construction firm for fraud
In one instance, CICO inflated the value of a reference contract from about US$17.5 million to approximately US$79 million dollars in order to meet AfDB’s prequalification criteria.
The African Development Bank Group (AfDB) today announced it has debarred Chongqing International Construction Corporation (CICO) for a minimum period of twelve months. According to the statement by the leading development finance institution on the continent, its Office of Integrity and Anti-Corruption established that CICO engaged in fraudulent overstatement of the previous projects it had executed in bidding for AfDB-financed road project in Uganda.
In order to meet the pre-qualification requirements of the tenders, CICO inflated its purported experience with similar projects, grossly overstating both the scope and the value of contracts it said it had successfully completed in the past.
AfDB said CICO shall be released upon expiry of the debarment period, provided the company adopts and implements a comprehensive integrity compliance programme that meets the standards of the Bank. The AfDB further said it will verify the adequacy of CICO’s compliance framework prior to any release decision.
“It is the duty of the African Development Bank to ensure that the funds it receives from donors are used exclusively to further the socio-economic development of the institution’s regional member countries. CICO will therefore remain debarred until the Bank is assured that it is not putting funds at risk by doing business with this company,” said Bubacarr Sankareh, acting Director of the Office of Integrity and Anti-Corruption.
In 2013, CICO participated in tenders for works contracts under the AfDB-financed Road Sector Support Project in Uganda. In order to prequalify for the tenders, CICO was required to show that it had successfully completed at least four similar projects in the previous five years. But to meet this requirement, CICO inflated the scope and the value of its reference contracts. In one case, a contract for a road of 4.4 kilometres was falsely presented as 68 kilometres in length. In another instance, the value of a reference contract was inflated from about US$17.5 million to approximately US$79 million dollars in order to meet the prequalification criteria.
According to information on its website, CICO, a Chinese construction and engineering company, is a mainstay subsidiary of Chongqing Foreign Trade and Economy Corporation CFTEC), established in 1985. Known for undertaking road projects in Africa, CICO says it has been qualified as a “Class A enterprise for China-aided turnkey project.”
The Office of Integrity and Anti-Corruption of the African Development Bank Group is responsible for preventing, deterring and investigating allegations of corruption, fraud and other sanctionable practices in Bank Group-financed operations.
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