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.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.
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; email@example.com