The World Bank on June 5 announced the nine-month debarment of China Railway Construction Corp., a Chinese, state-owned construction and engineering company, and its wholly owned subsidiaries, China Railway 23rd Bureau Group (CR23) and China Railway Construction Corp. (International) Limited (CRCC International), concerning misconduct under the East-West Highway Corridor Improvement Project in Georgia.
The debarment is part of a settlement agreement with CRCC, CR23, and CRCC International related to misconduct during the procurement process for a highway construction contract. The debarment also extends to CRCC’s 730 controlled affiliates, except for China Railway 20th Bureau Group and its controlled affiliates, which were subject to a separate settlement agreement with the World Bank in 2017.
Some of the goals of the affected project were to reduce road user costs along a highway corridor section in Georgia and to strengthen the capacity of the roads department to manage the road network. According to the facts of the settlement, during the prequalification and bidding process for a highway construction contract, the three named companies prepared and submitted information that misrepresented the personnel and equipment of CR23 and the experience of other entities in its group as CRCC’s. Within the World Bank’s administrative sanctions system, these actions are considered fraudulent practices as defined by World Bank Procurement Guidelines.
Following their nine-month debarment, CRCC, CR23, CRCC International, and their 730 controlled affiliates will be conditionally non-debarred for 24 months. During this period, they will again be eligible to participate in World Bank-financed projects if they comply with their obligations under the settlement agreement. If they do not, the conditional non-debarment will convert to debarment with conditional release.
The settlement provides for a reduced period of debarment considering CRCC, CR23, and CRCC International’s acknowledgement of responsibility, their voluntary remedial and corrective actions, their cooperation with INT, and other mitigating factors. As a condition for release from sanction, the companies and their affiliates commit to enhancing their integrity compliance programs in a manner consistent with the principles set out in the World Bank Group Integrity Compliance Guidelines. The company also commits to continue to fully cooperate with the World Bank Group Integrity Vice Presidency.