… China Harbour Engineering company accused of fraud, corruption
Government awarded the tender for the controversial dualisation of the US$2 billion Beitbridge-Harare-Chirundu highway to dodgy companies amid revelations that the contractor China Harbour Engineering Company Ltd (CHEC) was blacklisted by the World Bank for fraud and corruption, while the financier Geiger International specialises in military equipment not construction works.
By Herbert Moyo
CHEC, a subsidiary of China Communications Construction Company (CCCC) Limited, also attracted controversy in Uganda and several other countries for shady deals.
Work on the Beitbridge project started three weeks ago with the deployment of local engineers on site to carry out exploratory work ahead of the signing of a memorandum of understanding and the arrival of CHEC and Geiger International who will finance the project.
The project is expected to officially commence next month.
Chinese Firm CHEC’s parent company, CCCC, has a dodgy past after it was blacklisted by the World Bank over fraudulent practices by its predecessor company China Road and Bridge Corporation in 2009.
The debarment is still in force. “The World Bank today announced the debarment of, and all its subsidiaries, for fraudulent practices under Phase 1 of the Philippines National Roads Improvement and Management Project. Under the sanction, CCCC is ineligible to engage in any road and bridge projects financed by the World Bank Group until January 12, 2017,” the bank stated in a press release dated July 29 2011.
Also in 2011, a Hindu publication reported that the courts in Bangladesh ruled CHEC paid bribes to the son of the ex-Bangladeshi Prime Minister Khaleda Zia who was then sentenced in absentia to six years in prison.
“Rahman, the younger son of (ex- Prime Minister) Ms Zia, was accused of taking bribes from CHEC and the Bangladesh subsidiary of Germany’s industrial giant Siemens AG for helping them win government contracts during his mother’s 2001—2006 premiership,” the publication wrote in a story dated June 23, 2011.
In 2012, the Jamaican government also conducted an audit into two major infrastructure projects, one of which was awarded to CHEC.
The Ministry of Transport, Works and Housing said at the time “the report from the forensic auditor has unearthed wanton disregard for the conventions and procedures established by the Government of Jamaica for project implementation, administration and management.”
“These breaches of existing procurement guidelines have drained precious budgetary resources and undermined the very foundation of public institutional integrity,” the ministry was quoted by the Caribbean Analysis.
CHEC also negotiated with the Cayman Islands Premier to build and run a major port facility. According to the CayCompass publication in 2013, this deal was only stopped when the British government blew the whistle over the procurement arrangements.
In Uganda, CHEC was implicated in the inflation of a railway construction project resulting in parliamentarians demanding a corruption investigation into the 2012 award of a contract to the company to build a standard gauge railway in the eastern part of the country.
Legislators Theodore Ssekikubo accused President Yoweri Museveni’s government of corruption after it cancelled the initial offer to China Civil Engineering Construction Corporation who had offered to build the same railway at US$1,7 billion. CHEC dramatically raised the cost of the project to US$8 billion.
It has also since emerged that Geiger, an Austrian firm, invested heavily in China since 1990 where it specialises, in among other things, the production of military and security related equipment and lists governments in Africa, the Far East and the Americas as its clients.
According to the company’s website, “Geiger International has successfully been manufacturing under license military goods in its own factories in mainland China for over two decades.”
“Geiger International was established in 1990 by experts in the field of defence and security logistics, to supply government-run and other security organisations world-wide,” reads the company website.
“We not only have our own production facilities in China but also have forged links with several significant manufacturing interests thus giving us an unparalleled capacity.”
Sources within the construction industry said that although Geiger was also involved in construction projects, “their strong military leanings raise questions about their expertise and capacity, and whether the Zimbabwean military is not also involved in the road project as it has been in other projects like mining which ought to be undertaken by civilians.”
The military has business ventures across different sectors of the economy, especially gold, diamond and platinum mining.
Transport Minister Joram Gumbo was not reachable for comment as his mobile phone went unanswered.