The Herald (Zimbabwe)



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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