World Bank sanctions Chinese companies over project fraud
The World Bank has announced 18-month sanctions against China National Electric Engineering Company (CNEEC) and its wholly owned subsidiary, China Electric Design and Research Institute Company (CEDRI) in connection with fraudulent practices as part of the Lusaka Transmission and Distribution Rehabilitation Project, in Zambia.
CEDRI has been sanctioned with debarment with conditional release, which makes the company ineligible to participate in projects and operations financed by institutions of the World Bank Group. CNEEC has been sanctioned with conditional non-debarment, which means that it remains eligible to participate in projects and operations as long as it complies with its obligations under the settlement agreement.
The project was designed to increase the capacity and improve the reliability of the electricity transmission and distribution system in Lusaka. CEDRI engaged in fraudulent practices by failing to disclose a conflict of interest and by presenting false documents with CNEEC’s company name in order to meet the requirements of a contract under the project. CNEEC, as a controlling affiliate of CEDRI, failed to oversee CEDRI’s misconduct.
