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AFDB bans Chinese road building company for graft in Uganda  

The African Development Bank (AFDB) has barred Chinese road builder China Henan International Corporation Group (CHICO) for indulging in fraudulent activity in a project the development bank is funding in Uganda.  

According to Business Daily Africa, the ban on the Chinese road constructor will last for 12 months effective March 28 and will stop them from participating in any new AFDB-funded project in the continent.  

The Ban affected an ongoing road construction project being handled by CHICO in Kenya.  

An AfDB investigation revealed that the Chinese road builder engaged in fraudulent activity in the procurement of their most recent project in Uganda.   

  • “CHICO 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 AFDB said in a statement  

The development bank said the road project connecting the Southwestern and eastern parts of Uganda is crucial to promoting regional integration and cross-border trade with the Democratic Republic of the Congo and Kenya. 

CHICO has road projects in Tanzania, Kenya and Uganda funded by the AFDB, World Bank and Local Government some of which were marred by irregularities from CHICO.  

The AFDB has lately dished out strings of disciplinary measures on companies working under its purview.  

Last year it banned five companies from working on projects funded by the bank or its affiliates on the grounds of the companies engaging in fraudulent activities.  

CHICO would be expected to implement an integrity compliance program before it can resume working with the AFDB after the ban.  

  • “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,” the lender said. 

Throughout the one-year ban, CHICO group and its subsidiaries would be ineligible to partake in any AFDB-funded project. 

What to Know  

  • In 2022, CHICO abandoned the AfDB-funded Kisii-Isebania road project in southwestern Kenya, after it demanded payment of arrears amounting to Sh1.5 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 Sh3.7 million ($27,907) from a farmer. 
  • In Tanzania, CHICO is constructing a 57-kilometre road linking Mkiwa-Itigi and Noranga towns in the Singida region in the central parts of the country. That project would have to be halted following the ban by the AFDB.  

 


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