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AfDB Blacklists Top Chinese Contractor for Tender Fraud
China Henan Int’l Corp. failed to disclose use of agent in Uganda road project bid.
The African Development Bank (AfDB) has blacklisted a Chinese contractor that has undertaken several key projects in Kenya for fraudulent tendering practices.
AfDB said an investigation conducted by its detectives had established that China Henan International Cooperation Group (CHICO) engaged in fraudulent practices when tendering for a project financed by the development agency in Uganda.
CHICO is accused of failing to disclose the use of a commission agent when bidding for civil works to upgrade Rukungiri-Kihihi-Ishasha/Kanungu to a bituminous standard, a component of the Road Sector Support Project in Uganda.
As a consequence, the Henan, China-based contractor was banned from AfDB-funded programmes and projects for 12 months, effective March 28, 2024.
Cross-debarment
Additionally, the action qualifies for cross-debarment by other lenders under the Agreement for Mutual Enforcement of Debarment Decisions, including the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank, and the World Bank Group.
“Pursuant to the negotiated settlement agreement, China Henan International Cooperation Group Company Limited, registered in China, will be debarred for 12 months, effective 28 March 2024,” AfDB said on Thursday.
At the end of the debarment period, CHICO will only be allowed to participate in AfDB Group-financed projects after implementing an integrity compliance program consistent with the Bank’s guidelines.
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China Henan Int’l Corp. has been a prominent figure in the construction landscape of Kenya, having executed numerous projects in the country.
In 2017, the company was awarded a tender valued at Sh1.9 billion to replace the Kainuk Bridge in Turkana and to construct three kilometres of approach roads.
Three years later in 2020, was hired to undertake construction and rehabilitation work on several wastewater treatment facilities in Kiambu County.
The Sh1.6 billion project was financed by AfDB.
CHICO has also had its share of controversy.
In July 2022, the company, which had been contracted to construct the Kisii-Isebania road, abandoned the Sh9 billion project over a Sh1.5 billion debt.
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Enforcement measures
Cases of debarment are on the rise as the AfDB intensifies enforcement measures to ensure accountability, integrity, and transparency in its projects.
In December 2021, another Chinese firm, Weihai Construction Group, was blacklisted by the African bank for fraud in projects it was handling in Kenya.
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An investigation conducted by the AfDB’s detectives found that Weihai Construction Group committed fraud in the Kenol-Sagana-Marua Highway project, phase two of the Nairobi River basin rehabilitation and restoration programme project, and the Towns Sustainable Water Supply and Sanitation Programme.
Consequently, the company was banned from AfDB-funded programmes and projects for 35 months, effective November 19, 2021.
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