The World Bank has debarred three companies and a former general manager for engaging in collusive practices during bidding on contracts in Pakistan.
Pak Elektron Limited (PEL) and its affiliates, PEL Marketing Limited and Kohinoor Power Company Limited, have been debarred for 33 months for engaging in collusive practices during bidding on contracts under the World Bank-financed Electricity Distribution and Transmission Improvement Project in Pakistan.
The debarment makes the Lahore-based maker of electrical appliances and its affiliates ineligible to participate in World Bank-financed projects. Abdul Waheed Butt, PEL’s former general manager, is also ineligible to participate in World Bank-financed projects during the 33-month time period.
The debarments are part of two Negotiated Resolution Agreements, under which the company and Butt acknowledge responsibility for the underlying sanctionable practices and agree to meet specified corporate compliance conditions as conditions for release from debarment.
The World Bank-financed project was designed to strengthen electricity distribution and transmission networks to better meet increasing demand as well as strengthen the institutional capacity of selected distribution companies in Pakistan. According to the facts described in the settlement agreements, which the companies and Butt did not contest, PEL was part of a trade association group that collaborated to ensure that each received a pre-determined share of five World Bank-financed contracts.
An investigation by the World Bank’s Integrity Vice Presidency found that members of the group would decide in advance which among them would win particular contracts while setting the prices to be quoted in different World Bank-financed tenders. Butt was the chairman of the trade association and presided over meetings that discussed and allocated to members of the group two of the five Bank-financed contracts affected by the scheme. Under World Bank procurement guidelines, these actions constitute collusive practices.
The settlement agreements provide for reduced periods of debarment in light of Butt’s and the companies’ cooperation and voluntary remedial actions, the World Bank said. As a condition for release from sanction under the terms of the settlement agreements, the parties commit to develop integrity compliance programs consistent with the principles set out in the World Bank Group Integrity Compliance Guidelines. They also commit to continue to fully cooperate with the World Bank Group Integrity Vice Presidency.
The debarments qualify for cross-debarment by other multilateral development banks under the Agreement for Mutual Enforcement of Debarment Decisions that was signed in April 2010.