June 25, 2024

The African Development Bank (AfDB) has imposed sanctions on a significant Chinese contractor, known for several primary projects in Kenya, over fraudulent tendering activities. Investigations by AfDB’s sleuths have unearthed evidence of the China Henan International Cooperation Group (CHICO) participating in deceitful practices during the bidding process for a project in Uganda funded by the bank.

The accusation leveled against CHICO is their failure to disclose the engagement of a commission agent during the bid for civil works to upgrade the Rukungiri-Kihihi-Ishasha/Kanungu to a bituminous standard. This undisclosed action was part of Uganda’s Road Sector Support Project.

Following the exposure, CHICO, which is based in Henan, China, has been barred from any AfDB-financed programs and projects for a duration of 12 months, starting from March 28, 2024.

Cross-Debarment

Moreover, other lending entities can also impose this sanction, a move referred to as cross-debarment, in line with the Agreement for Mutual Enforcement of Debarment Decisions. These entities include the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank, and the World Bank Group.

After the expiry of this debarment period, CHICO is only permitted to participate in AfDB Group-financed projects if it implements an integrity compliance program in accordance with the Bank’s regulations.

China Henan Int’l Corp., remarkably visible in Kenya’s construction field, has completed multiple projects in the country. The company, in 2017, won a tender worth Sh1.9 billion to replace the Kainuk Bridge in the Turkana region and build three kilometers of approach roads.

In 2020, CHICO was employed to construct and renovate multiple wastewater treatment facilities in Kiambu County. The project cost, funded by AfDB, totaled Sh1.6 billion.

Enforcement Measures

Debarment cases are witnessing a surge as AfDB augments enforcement processes to implement accountability, integrity, and transparency in projects.

In December 2021, Weihai Construction Group, another Chinese firm, was blacklisted by AfDB for fraudulent activities in projects in Kenya. Following investigations conducted by AfDB’s detectives, it was established that the company was involved in fraudulent activities in the Kenol-Sagana-Marua Highway project, Phase two of the Nairobi River basin rehabilitation project, and the Towns Sustainable Water Supply and Sanitation Programme. Consequently, the firm was prohibited from participating in any AfDB-funded programs and projects for 35 months, from November 19, 2021.

### Frequently Asked Questions

What is cross-debarment?

Cross-debarment refers to the practice where sanctions or debarments imposed by one organization, like AfDB, are recognized and enforced by other similar organizations. In this case, the cross-debarment can be executed by entities such as the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank, and the World Bank Group.

What happens after debarment period ends?

At the conclusion of the debarment period, CHICO can again participate in AfDB Group-financed projects. However, they are required to implement an integrity compliance program that aligns with the Bank’s regulations.

Have other companies been blacklisted by AfDB?

Yes, in December 2021, another Chinese firm, the Weihai Construction Group, was blacklisted by AfDB for fraudulent activities in projects it was undertaking in Kenya. The company was banned from participating in AfDB-funded programs and projects for 35 months.