Concerns over Hankede project contract awarded to World Bank-sanctioned Chinese company

The contact signing of the EPC contract for Hankede Integrated Tourism Development Project between Maldives Fund Management Corporation (MFMC) and China National Electrical Engineering Company (CNEEC) was held at the Economic Ministry. | Photo: Economic Ministry

Malé, Maldives – According to the World Bank’s press release on October 28, 2020, China National Electric Engineering Company Limited (CNEEC) was sanctioned for 18 months along with another Chinese engineering company for fraudulent practices related to a project in Zambia.

The World Bank investigation found that China National Electric Engineering Company Limited (CNEEC) and its wholly owned subsidiary, China Electric Design and Research Institute Company Limited (CEDRI) had engaged in fraudulent practices in the procurement of contracts and in the misrepresentation of their qualifications.

The investigation revealed that the two companies had colluded in the submission of false documents in order to qualify for the contract, and had subsequently engaged in fraudulent practices during the procurement process.

The World Bank’s investigation also found that the companies had falsified documents relating to their experience and qualifications, in order to mislead the client and secure the contract.

The sanctions imposed by the World Bank on CNEEC and the other company included debarment from participating in World Bank-financed projects for 18 months.

The companies were also required to cooperate with ongoing investigations by the World Bank’s Integrity Vice Presidency.

The awarding of a major contract to a company that has been sanctioned by the World Bank for fraudulent practices raises concerns about the transparency and governance of the awarding process.

The contact signing of the EPC contract for Hankede Integrated Tourism Development Project between Maldives Fund Management Corporation (MFMC) and China National Electrical Engineering Company (CNEEC) was held yesterday at the Economic Ministry. 

Hankede, as an integrated project, is being developed with a USD145 million (MVR 2.2 billion) loan from the Bank of China.

Critics have argued that the Maldives government should have taken into account the World Bank’s findings before awarding the contract to CNEEC.

In response to the concerns raised, a Maldives government official who remains to stay anonymous told ‘The Times of Addu’ defending the governments decision to award the contract to CNEEC, stating that it was chosen through a competitive bidding process and that the company has a track record of delivering high-quality projects on time and within budget.

However, it remains to be seen how the project will be implemented and whether appropriate safeguards will be put in place to ensure transparency and governance.

World Bank Group Sanctions Two Chinese Engineering Companies for 18 months Press Release – OCTOBER 28, 2020 – https://www.worldbank.org/en/news/press-release/2020/10/28/world-bank-group-sanctions-two-chinese-engineering-companies-for-18-months