WASHINGTON, August 2, 2013— The World Bank Group today announced the debarment of Consulting Engineering Services (India) Pvt. Ltd. for a period of five years following misconduct following an investigative and forensic review of poorly performing road construction contracts under the World Bank-financed Lucknow-Muzaffarpur National Highway Project in India. CES was the supervision consultant for these contracts.
The debarment is part of a Negotiated Resolution Agreement between the World Bank and CES that addresses misconduct that occurred under CES’s former ownership and former management. The settlement resolves an investigation into allegations that CES defrauded the Highway Project and received bribes from construction contractors on the Project.
CES agreed not to contest, for purposes of the Agreement, that former CES engineers approved forged and falsified invoices used to support advance claims for payment under the contracts, in part in exchange for receiving improper cash payments and other things of value for their personal benefit. Further, the company also agreed not to contest, for purposes of the Agreement, the fact that the CES bid submitted by its former management and former owners for the supervision contract contained falsified credentials of its proposed staff.
The five-year debarment came into effect on August 2, 2013. During this period, CES will not qualify for any contract financed by the World Bank Group. In addition to conducting its own internal investigation which resulted in 19 personnel actions, CES has fully cooperated with the World Bank Integrity team and has begun reforming its corporate compliance program.
“This case demonstrates the World Bank’s strong commitment to manage corruption risks and the progressive shift we are making in promoting corporate compliance,” said Leonard McCarthy, World Bank Integrity Vice President. Companies, like CES, who, when notified of misconduct, self-investigate and take actions against wrongdoers offer a good example. We remain committed to ensuring our projects deliver services with integrity and will only engage with companies that share the same values.”
The five-year debarment may be converted to conditional non-debarment at the end of the first twenty-four months if the company fulfills its obligations under the agreement. CES has agreed to modify its existing internal controls and corporate governance framework to reflect the standards, principles and components of an effective integrity compliance program consistent with the World Bank Group Integrity Compliance Guidelines. CES also will continue to cooperate with the Integrity Vice Presidency, including by conducting further internal investigations. Under the conditional non-debarment sanction, companies are allowed to bid for World Bank-financed projects so long as they continue to comply with certain obligations.
The debarment of CES qualifies for cross-debarment by other MDBs under the Agreement of Mutual Recognition of Debarments that was signed on April 9, 2010.
About the World Bank Integrity Vice Presidency
The World Bank Integrity Vice Presidency (INT) is responsible for preventing, deterring and investigating allegations of fraud, collusion and corruption in World Bank projects, capitalizing on the experience of a multilingual and highly specialized team of investigators and forensic accountants.
Key results of INT’s work in FY12-13 include:
- 130 entities sanctioned in FY12 and 13 including settlements where companies are debarred as a default sanction in addition to committing to cooperation with the Integrity Vice Presidency. These include the Canadian company SNC Lavalin (and more than 100 of its affiliates) and the Indian company Larsen and Toubro Limited among others.
- 417 jointly recognized debarments among MDBs that signed the Cross Debarment agreement on April 9, 2010.
- Building precautions against fraud and corruption into high-risk projects.
- Following Alstom’s acknowledgment of misconduct in relation to a Bank-financed hydropower project in Zambia, the World Bank debarred Alstom Hydro France and Alstom Network Schweiz AG (Switzerland) - in addition to their affiliates - for a period of three years as part of a Negotiated Resolution Agreement between Alstom and the World Bank, which includes a restitution payment by the two companies totaling approximately $9.5 million.
- The second meeting of the International Corruption Hunters Alliance brought together 175 senior enforcement and anticorruption officials from 6 regions, to inject momentum into global anti-corruption efforts.
- Cooperation agreements in support of parallel investigations, asset recovery and information sharing with the UK Serious Fraud Office, the European Anti-Fraud Office, Interpol, the Korean Supreme Prosecutor’s Office, the Ethiopian Ethics and Anti-Corruption Commission, the Philippine Ombudsman, the Liberian Anti-Corruption Commission and several other national and international authorities.
- Enhanced preventive training and forensic audits designed to identify and address red flags and integrity controls in World Bank-financed projects.
- The World Bank introduced its new App to report fraud and corruption allegations relating to its projects. The new App also complements other tools and information resources to support the detection of fraud and corruption red flags. The World Bank Integrity App is available for the IOS platform through the iTunes store.