Leone Bridge constructors debarred for fraud

The company responsible for the $10 million Leone Bridge, China Railway First Group Samoa Company Limited, has “ceased” carrying on business in the country, after its blacklisting by the World Bank. 

The Ministry of Commerce, Industry and Labour (M.C.I.L.) registries say the company has been “removed” effective on 12 August 2020. 

This follows the company being blacklisted last year in connection with allegedly fraudulent practices during the construction of the Dasu Hydropower Stage I project in Pakistan. 

In a statement issued by the World Bank the company’s two-year debarment is from 17 September 2019 until 16 September 2021. 

The debarment makes the company 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 ineligible practices and agrees to meet specified compliance conditions as a precondition for its release.

At the end of a minimum period of 18 months of debarment, if the company 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 that led to its blacklisting was designed to facilitate the expansion of the electricity supply of hydropower in Pakistan. 

According to the facts of the case, China Railway First 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.

According to M.C.I.L. records, Yong Qiao and Jie Wu were the shareholders and directors of the company and it was first incorporated in this country 2014. 

In 2017, the China Railway First Group Samoa Company Limited officially opened the reconstructed Leone bridge that had been destroyed by flooding brought by Cyclone Evan in 2012.

Samoa, was responsible for the $10,915,707.48 project and it was contracted by the Land Transport Authority at the time to conduct the project co-funded by the World Bank.

Another project that was awarded to the company was the Mali'olio Bridge project. But the company voluntarily withdrew. The Tender Board instead resumed the process to evaluate the next lowest and compliant bidder and the $7.64 million project was awarded to the Ah Liki Construction.

Due to variations to the project, which were approved by the World Bank, the total cost of the project amounted to $8.3 million.