World Bank banned China Harbour Engineering Company

We are reproducing the following news item which carried by the news agencies in 2012. The CHEC maintained a strongest relationship with the corrupted ruling party in Sri Lanka under the direction of Mahinda Rajapaksa, the President of the country. 

( February 20, 2014, Colombo, Sri Lanka Guardian) The Chinese company that the Cayman Islands government is negotiating with over the development of cruise berthing facilities has been banned by the World Bank because of fraud and corruption. The parent company of China Harbour Engineering Company (CHEC), China Communications Construction Company Limited (CCCC), has been barred from being involved in projects financed by the global bank since 2009 under its fraud and corruption sanctioning policy. The revelation was made by the Jamaica’s Contractor-General, Greg Christie, who has raised concerns about developments in that country which were given to the Beijing based firm.

Cayman Islands Premier McKeeva Bush, who is facing opposition from the UK's Foreign and Commonwealth Office over his decision to negotiate with CHEC outside internaitonal procurement standards, has insisted since he moved into exclusive talks with the firm last year that it is the best company for the job.

However, the revelations about the World Bank's ban on the firm adds fuel to the mounting controversy in the region regarding the firm and its involvement in various Caribbean capital projects. The bank has stated that any firm directly or indirectly controlled by CCCC is ineligible for any World Bank financed contracts related to roads and bridges during the period 12 January 2009 to 12 January 2017, which automtically extends to CHEC as it is a major subsidary of CCCC.

In its efforts to combat corruption in public sector contracting the bank prohibits member countries from awarding World Bank-financed contracts to any of the firms or individuals that it has sanctioned. Christie has questioned whether the government in Jamaica had identified CHEC’s debarred status.

“Now that it is known that the World Bank, in the judicious application of its anti-fraud and anti-corruption policies in public contracting, has had cause to sanction and to debar CCCC and CHEC from receiving World Bank financed contracts, the obvious question that now arises is whether this is something that the government, as a matter of good, prudent and diligent business practice, intends to be guided by in the award of its own contracts that are financed from non-World Bank sources,” Christie said, adding that the revelation must be set against the backdrop of other controversies surrounding CHEC.

According to the Jamaican media, China Harbour Engineering Company (CHEC) has rejected the concerns, stressing that it was not involved in and had never been involved in any activity that has attracted sanctions by the World Bank.

It said the issue related to 2003 and involves the China Road and Bridge Group, which was later taken over by CCCC in 2005. CHEC claimed its parent company came under the debarment in 2011 based on changes made at that time to the World Bank system.

The Cayman premier signed an MOU with CHEC last year and has been in negotiations ever since to build two finger piers in George Town with an extensive upland development, a well as a pier in West Bay and the redevelopment of the jetty in Spotts as a bad weather alternative for cruise ships to anchor

The talks have been embroiled in controversy because of concerns about the firm, the way it was selected by the premier and exactly how the escalating cost of the project will ultimately be met. CHEC has agreed to design, build and finance the project and recoup its investment over a period of fifty years but it is not clear what share of the port fees, which normally go to the public coffers, will be redirected to CHEC.