Overview:
The Office of Integrity and Anti-Corruption of the African Development Bank Group said its investigations established that the Chinese firm “engaged in a fraudulent practice when it failed to disclose the use of a commission agent while submitting a bid in the context of a tender for the procurement of civil works for upgrading of Rukungiri-Kihihi-Ishasha/Kanungu to bituminous standard, a component of the Road Sector Support Project in Uganda.”
The African Development Bank Group (AfDB) has banned the Chinese company, China Henan International Cooperation Group Company Limited (Chico), from participating in any business funded by the bank for one year over fraud while bidding for a road project in Uganda.
The Office of Integrity and Anti-Corruption of the African Development Bank Group said its investigations established that the Chinese firm “engaged in a fraudulent practice when it failed to disclose the use of a commission agent while submitting a bid in the context of a tender for the procurement of civil works for upgrading of Rukungiri-Kihihi-Ishasha/Kanungu to bituminous standard, a component of the Road Sector Support Project in Uganda.”
After the ban, which started on March 28, 2024, the Chinese contractor and any of its affiliates, including its leaders and subsidiaries, “will be ineligible to participate in Bank Group-financed activities.”
“At the expiry of the debarment period, China Henan International Cooperation Group Company Limited will only be eligible to resume participation in African Development Bank Group-financed activities after it implements an integrity compliance program consistent with the Bank’s guidelines,” AfDB said.
The company will also be required to cooperate with the Office of Integrity and Anti-Corruption and with law enforcement agencies and regulatory authorities of African Development Bank Member Countries in their investigative functions.
The upgrading of the Rukungiri-Kihihi-Ishasha/Kanungu and Bumbobi-Lwakhakha roads from gravel to bitumen standard are expected to contribute to support the tourism industry and prmote cross border trade with the Democratic Republic of Congo and Kenya.
Chinese firms have previously been accused of indulging in corrupt practices to secure business opportunities in Africa.
This is not the first time Chico is mired in controversy in the road projects it is undertaking in Kenya, Tanzania, and Uganda. In 2022, Chico abandoned the AfDB-funded Kisii-Isebania road project in southwestern Kenya, after it demanded payment of arrears amounting to Ksh1.5 billion ($11.3 million).
In 2019, the company was charged in a Kisii court, accused of forging lease agreements for parcels of land, and fraudulently obtaining soil valued at Ksh3.7 million ($27,907) from a farmer.