WASHINGTON, September 18, 2019 — The World Bank today announced the two-year debarment of China Railway First Group Co. Ltd. (CRFG), a Chinese, state-owned, construction company, in connection with fraudulent practices under the Dasu Hydropower Stage I Project in Pakistan.
The debarment makes CRFG ineligible to bid on future World Bank Group-financed projects for the period of the debarment. It is part of a settlement agreement under which the company acknowledges responsibility for the underlying sanctionable practices and agrees to meet specified corporate compliance conditions as a condition for release from debarment.
At the end of a minimum period of 18 months of debarment, if CRFG has complied with the terms of the settlement agreement, it will be eligible to have its debarment converted to a conditional non-debarment for a further minimum period of six months.
The project was designed to facilitate the expansion of electricity supply of hydropower in Pakistan. According to the facts of the case, CRFG engaged in multiple misrepresentations during the bidding process for four contracts – two of which it won in 2015 – including failing to disclose subcontracted work, a subcontractor and an agent it used in bidding for one of the contracts. These are fraudulent practices under World Bank Group Procurement Guidelines.
The settlement agreement provides for a reduced period of debarment in light of the company’s cooperation and voluntary remedial actions, including corrective actions related to responsible employees and improvement of its compliance program. As a condition for release from sanction under the terms of the settlement agreement, the company commits to developing an integrity compliance program consistent with the principles set out in the World Bank Group Integrity Compliance Guidelines. The company also commits to continue to fully cooperate with the World Bank Group Integrity Vice Presidency.
The debarment of CRFG qualifies for cross-debarment by other multilateral development banks (MDBs) under the Agreement for Mutual Enforcement of Debarment Decisions that was signed on April 9, 2010.