Thursday, January 22, 2009

World Bank Acts on Philippine-China Corruption

This was a stunning act by the World Bank that is nonetheless most welcome since  under President Gloria Macapagal Arroyo the Philippines has sunk to the cellar of corruption in Asia.

The World Bank had been investigating a very serious case of corrupt collusion by companies and individuals in China and the Philippines since 2003 in connection with a road building project it had funded to the tune of $150 million. I am sure that the World Bank investigators were particularly irked and spurred to complete their investigation after they saw what happened with that coverup of the ZTE-NBN deal last year, in which SCoRP shamelessly did the dishonors of saving their Mistress from yet another sensational and clear-cut case of bribery and corruption at the highest levels. Here is NASDAQ coverage of this development:

WORLD BANK BANS 7 FIRMS
WASHINGTON -(Dow Jones)- The World Bank on Wednesday blacklisted seven firms and one individual for alleged collusion in a Philippine roads project funded by the bank, including several companies owned by the Chinese government.

Following a major investigation spanning several years by the Integrity Vice Presidency, the World Bank found evidence of a "major cartel involving and international firms bidding on contracts," it said in a release.

That led to four Chinese state-run firms being barred for the first time from doing business with the World Bank for a period of between five and eight years - the China Road and Bridge Corp., China State Construction Corp., China Wu Yi Co. Ltd. and China Geo-Engineering Corp.

A Philippine firm E.C. de Luna Construction Corp. and its owner, Eduardo C. de Luna, were each banned indefinitely. Two other Philippine companies, Cavite Ideal International Construction and Development Corp. and CM Pancho Construction Inc., were each barred for four years.

"This is one of our most important and far-reaching cases, and it highlights the effectiveness of the World Bank's investigative and sanctions process," said Leonard McCarthy, vice president of the World Bank Integrity department, in the statement.

The investigation began in 2003 after the World Bank team grew suspicious about collusion in the bidding process for a contract during the first phase of the Philippines National Roads Improvement and Management Program. The road improvement program was partially financed by a $150 million World Bank loan, though none of the sanctioned firms received any money.

In August 2008, the inquiry led the bank to ban a South Korean firm working on the roads project, Dongsung Construction Co. Ltd., for four years.

-By Tom Barkley, Dow Jones Newswires; 202-862-9275; tom.barkley@dowjones.com
In combination with that other sensational scandal, the ZTE NBN deal gone sour in the glare of publicity and Senate Blue Ribbon Committee hearings, the present indefinite ban on  firms on either side of the China Pond is major blackeye for President Arroyo who has effectively been referred to by Barack Obama in connection with corruption.

8 comments:

Pedestrian Observer GB said...

I saw on TV Patrol that some tongress errr congress people are "sympathetic" to the Filipino contractor claiming they (meaning Filipinos and Chinese)were being targeted without "evidence" daw because they "favor" daw the Koreans and Japanese firms....... here we go again with 2 sides kuno to the story telling a lie, lol.

Jose Canlas said...

Filipinos have an obligation to stand along each other. In order to protect the truck-drivers and other employees E.C. de Luna Construction Corp. and the other Filipino firms, then the province of Cavite and the Philippine government should continue to give contracts to the named firms.

Hindi ba ganoon dapat?

Anonymous said...

GAnoon dapat kung totoong ginagawa nila ang proyekto and hindi pinaghahatian ang contrata- 10% to TOngressman, 10% to bids committee, 10% to Gov. and 20% to Fat man.. yung 50% na natira ang pang project so after 5 years baku baku na ang highway tapos the Filipino taxpayer pays the 100% plus interest.. All these Congressmen are mere lapdogs for these big time crook contractors who are in cahoots with the Fatman and the midget. BTW Cavite Ideal controlled by the revillas? hmmmm

Karl M. Garcia said...

as far as I know if congress sympathized with the contractors in its hearing, the senate has scheduled a hearing of its own.

if you recall the petioners(my dad included)of the Abaya vs ebdane case ;questioned the project one of the foreign firms ivolved:china road and bridges corp; which was dismissed by the supreme court.

that case was used as a reference by the gov on executive agreementsin the ZTE NBN issue.

http://karl-garcia.blogspot.com/2009/01/wb-steps-in-our-procurement-mess.html

http://karl-garcia.blogspot.com/2009/01/more-on-procurement-reforms.html

pardon me for including a pdi opinion article of mon tulfo:he has ani intereting report about the cartel in the dpwh.

http://newsinfo.inquirer.net/inquirerheadlines/metro/view/20090122-184796/Cartel-at-the-DPWH

Tongue's Wrath said...

Whatever happened to the last contractor, UK's Mabey & Johnson which supplied all those bridges to nowhere? Wala lang?

Anonymous said...

I believe that in the long run the sambayanan will benefit if all these corrupt executives and politicians are stopped.

We all know that corruption anywhere in any gov't is there to stay. That can't be helped. The problem in our case is that our fake president herself seems to be the equivalent Al Capone, the ruthless mobster of Chicago in the of the 20's.

Karl M. Garcia said...

Tongue,
kailangan ko pa mag research kung bakit nalimutan na to ng tadhana at naging wala lang.

naging issue pala ito sa true state of the nation address ni lacson noong 2005.

the ngo of cong carlos padilla filed a complaint with the ombudsman wayback in 2005.

the last news about them was a 2007 news about a suspension of their project in Ilo-ilo

here are the links regarding the said contractor:

against corruption web site

FD Pascual

Inquirer article

and a pcij report where a uk news item was cited

pcij report

Tongue's Wrath said...

Thanks, Karl. In the first place, why did gov't hire M&J when it was notorious for its bribery, and it's well-known that they have earned the ire even of the British royalty?

Oh, oo nga pala. Bribe-giver kasi.