Kampala, (UG): The African Development Bank (AfDB) has blacklisted Chinese road builder China Henan International Corporation Group (CHICO) for allegedly engaging in fraudulent activity in a project the lender is funding in Uganda.
The ban instituted on the Henan-based constructor will last 12 months effective March 28, a period in which CHICO will not be able to participate in any new AfDB-funded projects on the continent.
An AfDB investigation revealed that the Chinese road builder failed to disclose the use of a commission agent while submitting a bid in the context of a tender for the procurement of civil works for upgrading of Rukungiri-Kihihi-Ishasha/Kanungu to bituminous standard, a component of the Road Sector Support Project in Uganda it said on Thursday.
The African Development Bank said the road project, spanning the southwestern and eastern parts of Uganda, is crucial to “promoting regional integration and cross-border trade with the Democratic Republic of the Congo and Kenya.”
“An investigation conducted by the Office of Integrity and Anti-Corruption of the African Development Bank Group, established that China Henan International Cooperation Group Company Limited engaged in a fraudulent practice when it failed to disclose the use of a commission agent while submitting a bid in the context of a tender for the procurement of civil works for upgrading of Rukungiri-Kihihi-Ishasha/Kanungu to bituminous standard, a component of the Road Sector Support Project in Uganda,” the African Development Bank said, adding that China Henan International Cooperation Group Company Limited, registered in China, will be debarred for a period of 12 months, effective 28 March 2024.
During the debarment period, the lender said China Henan International Cooperation Group Company Limited and specified affiliates will be ineligible to participate in Bank Group-financed activities.
“China Henan International Cooperation Group Company Limited will be required to cooperate with the Office of Integrity and Anti-Corruption and with law enforcement agencies and regulatory authorities of African Development Bank Member Countries in their investigative functions. At the expiry of the debarment period, China Henan International Cooperation Group Company Limited will only be eligible to resume participation in African Development Bank Group-financed activities after it implements an integrity compliance program consistent with the Bank’s guidelines,” the bank said.
CHICO has road projects in Kenya, Tanzania, and Uganda, funded by the AfDB, World Bank, and local governments, some of which have also been marred in various ways.
In 2022, CHICO abandoned the AfDB-funded Kisii-Isebania road project in southwestern Kenya, after it demanded payment of arrears amounting to Sh1.5 billion ($11.3 million).
In 2019, the company was charged in a Kisii court, accused of forging lease agreements for parcels of land, and fraudulently obtaining soil valued at Sh3.7 million ($27,907) from a farmer.
In Tanzania, CHICO is constructing a 57-kilometre road linking Mkiwa-Itigi and Noranga towns in Singida region in the central parts of the country.
AfDB has lately been debarring many companies for what it terms as engagement in fraudulent activities in projects it funds.
Last year, it prohibited five companies from engaging in the bank’s funded or affiliated projects, among them Kenyan company Goldsun Investments, which was found to have engaged in corruption during a tender for the dualling of the 84km Kenol-Sagana-Marua highway in Central Kenya.
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