Concerns over China Harbour amid World Bank sanctions

The Office of the Contractor General in Jamaica has raised concerns over local business dealings with China Harbour Engineering Company, the Chinese company that is also in extended negotiations with the Cayman Islands government on the construction of cruise berthing facilities in Grand Cayman. 

Jamaica’s OCG released a statement on Monday, 4 June saying it had recently discovered that China Harbour’s parent company China Communications Construction Company has been debarred by the World Bank under the Bank’s Fraud and Corruption Sanctioning Policy since January 2009.  

The policy is part of World Bank’s fight against corruption and fraud in public sector contracting. It prohibits member countries from awarding World Bank financed contracts to any of the firms or individuals that the Bank has sanctioned. Since 1999, more than 330 firms and individuals have been sanctioned and debarred by the bank for engaging in fraud and corruption on World Bank financed projects. 

Under the terms of the debarment, which extends to “any firm directly or indirectly controlled by CCCC” including China Harbour, CCCC and subsidiaries have been declared ineligible to be awarded any World Bank financed contracts that are related to “roads and bridges”, during the period from 12 January, 2009, to 12 January, 2017. The sanctions apply to CCCC as the designated successor entity to China Road and Bridge Corporation which, along with six other firms and one individual, was debarred by the World Bank for eight years, for fraudulent practices under Phase 1 of the Philippines National Roads Improvement and Management Project.  

“The new information that has come to light about CHEC’s parent company and, by extension, CHEC, should be viewed against the background of the many controversies which, to date, have surrounded the Government of Jamaica’s business dealings with the company,” the Office of the Contractor General in Jamaica said. 

In August 2009, Jamaica’s government awarded a US$400 million contract to China Harbour to execute the Jamaica Development Infrastructure Programme on a sole-source basis.  

The programme is not supported by World Bank but Jamaica’s Contractor General Greg Christie questioned whether Jamaica’s government had identified CHEC’s debarred status in its due diligence exercises and if it had influenced the decision making process when awarding the contract. 

“Now that it is known that the World Bank, in the judicious application of its anti-fraud and anticorruption 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,” he said. 

The circumstances which surrounded the contract award to China Harbour are the subject of a special OCG investigation.  

In the Cayman Islands, China Harbour Engineering Company has proposed to build cruise berthing facilities in George Town, cruise facilities in West Bay and to make improvements to the Spotts dock area. 

During his visit to Cayman in April, Overseas Territories Minister Henry Bellingham said the UK government was concerned with the procurement process surrounding the government’s agreement with China Harbour.  

“We have a number of concerns about this particular project, this is after all a huge project … for the Cayman Islands and it’s incredibly important that we get it right,” Mr. Bellingham said. “I’m not going to get into the technical detail of all of this. The [Framework for Fiscal Responsibility] … makes it very clear that procurement must be carried out to very high standards.  

“I’ve asked [the premier] to reassure me as to how he will bring this process back in line with international best practice. I suggested that he seeks the views of the chairman of the CTC and the auditor general on how he will achieve this,” he added.  

Cayman Islands Premier McKeeva Bush said negotiations with the Chinese government-owned developer would have to be extended for a few more months as the government is awaiting the completion of a financial review by KPMG and would have to present the proposal for the definitive agreement to Cabinet members, the Central Tenders Committee and the Auditor General’s office for review.  

This process is expected to take at least until September. 

CHEC

China Harbour Engineering in Jamaica
Joe Shooman
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1 COMMENT

  1. Cayman Islands Premier McKeeva Bush said negotiations with the Chinese government-owned developer would have to be extended for a few more months as the government is awaiting the completion of a financial review by KPMG and would have to present the proposal for the definitive agreement to Cabinet members, the Central Tenders Committee and the Auditor General’s office for review.

    This process is expected to take at least until September.

    I’m not the sharpest knife in the drawer, but it’s plain to me that Bellingham is saying (in diplomatic terms)produce a Business Case and then put the project out to tender. If CHEC has the best bid then they will get the project.

    Could it be that there is no business case for a pier at the Turtle Farm and the large upland development, just as there was no business case for JuJu paving private parking lots? So he continues down this path with his obstinate ways and then cries bureaucratic harassment when a higher power steps in to save us.

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