World Bank debars huge Chinese contractor for fraudulent practice in Georgia highways scheme

The World Bank has debarred for nine months state-owned China Railway Construction Corporation Ltd. (CRCC), ranked last year by Engineering News-Record as the world’s third biggest contractor by revenue, for practices considered fraudulent on a highways project in the country of Georgia.

Also debarred were its subsidiaries, China Railway 23rd Bureau Group Co (CR23) and CRCC International, and CRCC’s 730 controlled affiliates.

The project is Georgia’s $164m East-West Highway Corridor Improvement Project, for which the Bank is lending $140m. With funding approved in December 2015, it involves upgrading Georgia’s main east-west road to a four-lane concrete highway (pictured) so people and goods can move faster from ports on the Black Sea across the country to neighbouring Armenia and Azerbaijan.

In a settlement with the Bank, the companies admitted to misrepresenting, during the prequalification and bidding process for a highway construction contract, the personnel and equipment of CR23 and the experience of other entities in its group as CRCC’s. This the Bank considers fraudulent.

After nine months, CRCC and its entities will be conditionally non-debarred for 24 months, meaning they can bid for World Bank-financed projects as long as they comply with their obligations under the settlement agreement.

The Bank said the debarment period was reduced because the companies acknowledged responsibility and volunteered remedial and corrective actions.

One of CRCC’s affiliates, China Railway 20th Bureau Group, was not included in the debarment because it was subject to a separate settlement agreement with the World Bank in 2017.

Image: The project involves upgrading Georgia’s main east-west road to a four-lane concrete highway (World Bank)

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