Chinese Athi Water contractor faces AfDB embargo in Uganda

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Chinese Athi Water contractor faces AfDB embargo in Uganda

Sunday, April 26, 2020 22:31

By BRIAN NGUGI

A Chinese contractor that has undertaken several multibillion shilling road construction projects in Kenya faces an indefinite ban by the African Development Bank (AfDB) over suspected fraud.

The move comes after Zhongmei Engineering Group Ltd, which also operates in neighbouring Uganda, was found by AfDB to have misrepresented its date of incorporation in Uganda to secure a deal.

"An investigation conducted by the bank's Office of Integrity and Anti-Corruption established that Zhongmei engaged in fraudulent practice during a bidding process under the Road Sector Support Project 5," said AfDB in a statement.

"While submitting a bid for the tender for the Upgrading of the Rukungiri-Kihihi-Ishaka/Kanungu Road in Uganda, the company misrepresented its date of incorporation." It was listed as the winner of a Sh1.7 billion Athi Water Services project to construct a waste transmission pipeline between Kiambu and Embakasi. In 2016, it won a World Bank funded Kenya National Highway Authority (KeNHA) project to rehabilitate the Kakamega Webuye section of the Kisumu Kitale road.

Following the fraud, AfDB has asked the firm to implement a compliance monitoring programme over a year failure to which it will face a complete ban from participating in its projects.

"During the conditional non-debarment period, Zhongmei Engineering Group Limited remains eligible to participate in African Development Bank Group-financed projects provided it undertakes a corporate integrity compliance programme in accordance with the bank's Integrity Compliance Guidelines," said AfDB.

"Otherwise, the conditional non-debarment will convert to a sanction of debarment with conditional release, and the company will then become ineligible to participate in African Development Bank Group-financed projects until the conditions for its release are met."

Zhongmei did not respond to the Business Daily’s request for comment by press time.

The AfDB statement did not, however, say whether Zhongmei engaged in any fraudulent business in Kenya.

The Office of Integrity and Anti-Corruption of the AfDB is responsible for "preventing, deterring and investigating allegations of corruption, fraud and other sanctionable practices" in the bank's-financed operations.

A ban from the AfDB over fraud concerns may attract similar actions from other multilateral development banks including the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank and the World Bank.