Chinese company’s murky past looms large
In 2009, the World Bank debarred the China Communications Construction Company (CCCC) for its involvement in bid rigging on a Philippines road project. The company, through its subsidiary, received the harshest penalty of the firms involved; for eight years they would be ineligible to do road and bridge projects financed by the World Bank Group.
The CCCC and a subsidiary, China Harbour Engineering Company (CHEC), were also banned by the Asian Development Bank after they bribed the former Bangladeshi prime minister’s son, Arafat “Koko” Rahman, for a project to build a port in Chittagong. Rahman was reportedly jailed for laundering millions of dollars in bribes taken from the CHEC.
In 2011, the former chairperson of China’s Hebei Port Group, Huang Jianhua, was sentenced to death for taking bribes from the CCCC, the CHEC and others. According to reports, the Chinese authorities found the CCCC had given Huang a house after he arranged for the firm to win a 2008 bid for a construction project at the Huanghua Port Wharf in China.
But Ross Anthony, director of Chinese studies at Stellenbosch University, said the Exim Bank and the CCCC were involved in a number of projects in the developing world, and cautioned that it was important to bear this in mind when reading Western media which tends to highlight controversial cases.
The CCCC did not respond to a request for comment. money-loser. According to the Sri Lankan press, it had handled just 44 ships between 2015 and August this year. Massive infrastructure projects have caused the Sri Lankan government to drown in debt.
The new R57-billion deal by the Passenger Rail Agency of South Africa (Prasa) for the Moloto Rail Development Corridor will have at least one thing in common with all these infrastructure projects — it is financed by the Export-Import Bank of China (known as the Exim Bank) and will be built by the China Communications Construction Company (CCCC) and its subsidiaries.
The CCCC is a Chinese government-owned company listed on the Hong Kong and Shanghai stock exchanges with a market valuation of $34-billion.
Controversially, this company has been linked to a number of corrupt activities in the past (see “Chinese company’s murky past looms large”) and has previously been blacklisted by two development financiers — the Asian Development Bank and the World Bank — for corrupt behaviour.
The World Bank’s blacklisting made the CCCC and its subsidiaries ineligible to do any road and bridge projects financed by the bank and spanned eight years. It was only lifted in January this year.
The World Bank recognised, however, that in 2009 China amended its law to make it a criminal offence for Chinese companies and citizens to bribe foreign government officials.
In a 2015 report, Transparency International found poor levels of transparency in large emerging-market companies. José Ugaz, chair person of Transparency International, at the time, made specific mention of the CCCC: “Time and again we see huge corruption scandals involving multinationals, such as … China Communications Construction Company, doing immense damage to local economies.”
Prasa is believed to have signed its deal with Exim Bank and the CCCC on the sidelines of a recent Brics (the Brazil, Russia, India, China and South Africa grouping) summit in China — without a board or even a permanent chief executive in place.
Prasa did not consult the treasury prior to signing the deal: it neither asked about government guarantees,