The Herald (Zimbabwe)


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AFRICAN De­vel­op­ment Bank and Sino­hy­dro have reached a set­tle­ment agree­ment on fraud­u­lent prac­tices.

Sino­hy­dro Cor­po­ra­tion has agreed to a com­pre­hen­sive ver­i­fi­ca­tion of its com­pli­ance pro­gramme by the African De­vel­op­ment Bank fol­low­ing the de­tec­tion of a fraud­u­lent prac­tice in ten­der­ing for works con­tracts in Uganda.

Sino­hy­dro has been awarded con­tracts in Zim­babwe, which in­clude Kariba South ex­ten­sion and Hwange Power Sta­tion. The ten­der for Kariba South was awarded at a to­tal cost of $533 mil­lion, a fig­ure which was crit­i­cised for be­ing dou­ble the price of sim­i­lar ex­pan­sion works on the other side of Zim­babwe.

On June 15, 2017, the African De­vel­op­ment Bank Group (AfDB) an­nounced the con­clu­sion of a set­tle­ment agree­ment with Sino­hy­dro Cor­po­ra­tion.

An in­ves­ti­ga­tion con­ducted by the AfDB’s Of­fice of In­tegrity and Anti-Cor­rup­tion es­tab­lished that Sino­hy­dro Cor­po­ra­tion en­gaged in a fraud­u­lent prac­tice in bid­ding for works con­tracts in the con­text of the AfDB-fi­nanced Road Sec­tor Sup­port Pro­ject in Uganda.

As part of the set­tle­ment, the AfDB im­poses a con­di­tional non-de­bar­ment for a pe­riod of three years, sub­ject to the com­pany en­hanc­ing its global cor­po­rate com­pli­ance pro­gramme within that pe­riod to the in­sti­tu­tion’s full sat­is­fac­tion.

The AfDB will ver­ify the ad­e­quacy of Sino­hy­dro Cor­po­ra­tion’s com­pli­ance frame­work and the ro­bust­ness of its im­ple­men­ta­tion prior to any re­lease de­ci­sion.

In ad­di­tion, Sino­hy­dro Cor­po­ra­tion com­mit­ted to co-op­er­ate with the Of­fice of In­tegrity and Anti-Cor­rup­tion in its in­ves­ti­ga­tions of un­re­lated cases of mis­con­duct in AfDB-fi­nanced projects. The pe­riod of con­di­tional non-de­bar­ment may be re­duced to 24 months if Sino­hy­dro Cor­po­ra­tion com­plies with all con­di­tions of the agree­ment early.

“The pur­pose of the Bank’s sanc­tions regime is in equal mea­sures the de­ter­rence of sanc­tion­able prac­tices such as fraud and cor­rup­tion and the re­ha­bil­i­ta­tion of en­ti­ties found to have en­gaged in such.

“En­gag­ing with com­pa­nies and en­sur­ing the im­ple­men­ta­tion of ro­bust cor­po­rate com­pli­ance safe­guards is key to avoid re­cidi­vism,” says Anna Boss­man, Di­rec­tor of the AfDB Of­fice of In­tegrity and Anti-Cor­rup­tion.

In 2013, Sino­hy­dro Cor­po­ra­tion is said to have par­tic­i­pated in a ten­der for works con­tracts un­der the Bank-fi­nanced Road Sec­tor Sup­port Pro­ject in Uganda.

The in­ves­ti­ga­tion by the Of­fice of In­tegrity and Anti-Cor­rup­tion found that Sino­hy­dro Cor­po­ra­tion mis­rep­re­sented its prior pro­ject ex­pe­ri­ence by us­ing not yet suc­cess­fully and sub­stan­tially com­pleted con­tracts as ref­er­ences.

The Of­fice of In­tegrity and Anti-Cor­rup­tion of the African De­vel­op­ment Bank Group is re­spon­si­ble for pre­vent­ing, de­ter­ring and in­ves­ti­gat­ing al­le­ga­tions of cor­rup­tion, fraud and other sanc­tion­able prac­tices in Bank Group-fi­nanced op­er­a­tions.

The in­ves­ti­ga­tion by the Of­fice of In­tegrity and Anti-Cor­rup­tion of the African De­vel­op­ment Bank was con­ducted by Mo­hamed Kon­neh and Es­ther Lynn Mhone. African De­vel­op­ment Bank staff and the gen­eral pub­lic can use the Of­fice of In­tegrity and Anti-Cor­rup­tion se­cured hot­lines to re­port sanc­tion­able prac­tices within the Bank or op­er­a­tions fi­nanced by the Bank Group.

Since 2006, in­vest­ment from China has rapidly in­creased in Africa. Ac­cord­ing to a World Bank re­port in 2008, most of the Chi­nese in­vest­ment goes to the in­fras­truc­ture sec­tor, mostly hy­dropower, rail­road, and telecom­mu­ni­ca­tions.

The hy­dro-power projects are widely blamed for neg­a­tive im­pacts on lo­cal com­mu­nity and nat­u­ral en­vi­ron­ment. Sino­hy­dro was also fired as Botswana’s pri­mary con­trac­tor on Gaborone’s Sir Seretse Khama In­ter­na­tional Air­port (SSKIA) Ex­pan­sion Pro­ject Phase 2.

At the time of ter­mi­na­tion of the con­tract, Sino­hy­dro had com­pleted ap­prox­i­mately 90 per­cent of the pro­ject and had been paid about P527 mil­lion. — On­line.

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