MANILA – Seven construction companies, three from the Philippines and four from China, have been blacklisted by the World Bank (WB) for alleged corruption in the international bidding on a major road project in the country, a report from the WB headquarters in Washington D.C. disclosed.
The WB corruption unit said the seven firms were discovered to have allegedly formed a cartel and colluded during the bidding of the project, known officially as the Philippines National Roads Improvement Program or NRIMP 1, which is funded by the bank.
“As a result of swift action when suspicions of collusion in the bidding process were raised by the project team, the World Bank stopped an estimated $33 million from being awarded,” the WB said in a statement.
Due to the findings, the WB said the Philippine government has temporarily disqualified all seven firms from participating in biddings for public construction projects, whether funded by state revenues or by local and foreign lenders.
It identified the three Philippine-based companies and their corresponding penalties as the E.C. de Luna Construction Corporation and its owner, Eduardo de Luna, which were barred permanently; as well as the Philippine Cavite Ideal International Construction and Development Corporation and the CM Pancho Construction Incorporated, which were each barred for four years.
On the other hand, the WB said the four Chinese firms with their corresponding penalties were China Road and Bridge Corporation, barred for eight years; China State Construction Corporation and China Wu Yi Company Limited, barred for six years each; and China Geo-Engineering Corporation, barred for five years.
According to the WB, it also blacklisted for four years, a South Korean firm, Dongsung Construction Company Limited in August 2008 for fraud and corruption related to the NRIMP 1 in the Philippines.
The WB pointed out the seven firms were discovered to have engaged in corrupt and unsound practices as they vied go serve as contractors for NRIMP 1, a project involving various road development projects all over the country that the bank had earlier agreed to fund.
The erring companies were said to have colluded with government officials responsible for implementing the bidding process for the NRIMP 1.
“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,” said Leonard McCarthy, the WB vice president for integrity.
In Malacanang, a spokesman said President Gloria Macapagal-Arroyo ordered a top-level review of all WB-funded projects in the country, which will be discussed during the next Cabinet meeting on Tuesday to look into the corruption allegations.
Secretary Rolando Andaya Jr. of the Department of Budget and Management said the erring companies are barred from participating in any local project for 15 days, starting on Thursday, pending a recommendation from the Department of Public Works and Highways (DPWH).
The DPWH is widely perceived to be one of the most corrupt government agencies along with the Bureau of Customs and the Bureau of Internal Revenue.
At the same time, Andaya, also the head of the government Procurement Transparency Board, revealed that the WB already forwarded information on the seven blacklisted companies to the office of the Ombudsman.
He also said Ombudsman Merceditas Gutierrez promised to come out with a decision soon on whether to file criminal charges against the DPWH officials linked to the questionable projects.
But Andaya said World Bank officials assured the Philippine government they would continue to fund the second phase of the project costing $232 million.
The second phase, Andaya said, will involve the improvement of 450 kilometers of national arterial roads and bridges as well as the establishment of a comprehensive road maintenance program.
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[...] – Lawmakers crossed party lines to express alarm over disclosures by the World Bank (WB) regarding corruption, which allegedly involves mainly rigging of international bidding on Philippine road projects [...]
[...] to control the bidding, the WB announced from its headquarters in Washington D.C. that it had blacklisted three Filipino and four Chinese construction companies from participating in other projects funded by the [...]