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Posts Tagged ‘China Harbour Engineering’

Solomon Islands PM embraces crooked Chinese company based in PNG

January 22, 2015 3 comments
Prime Minister Sogavara and China Habour GM in Honiara

Prime Minister Sogavara and China Habour GM in Honiara

A crooked Chinese company based in PNG is reaching out to the Solomon Islands government in search of new contracts. The General Manager of China Harbour Engineering Company recently met with the Solomon Islands Prime Minister, Manasseh Sogavare – see news report below.

Mr Sogavara, who described China Harbour Engineering as a ‘reputable’ company and ‘genuine investor’, seems unaware the firm has been blacklisted by the World Bank for fraud and condemned by the courts in Bangladesh and the government in Jamaica.

In case Mr Sogavara has not been properly briefed, here is a ‘greatest hits’ list that highlights China Harbour Engineering’s disconcerting record:

  • China Harbour Engineering Company’s parent company, and all its subsidiaries (including its PNG subsidiaries), have been blacklisted until 12/1/2017 by the World Bank for all contracts related to roads and bridges, owing to “fraudulent practices” (Source: World Bank 2011).
  • The courts in Bangladesh found that China Harbour Engineering Company paid bribes to the son of the Bangladeshi Prime Minister, who was then sentenced to six years in prison. (Source: The Hindu 2011)
  • In 2012 an Audit was conducted by the Jamaican government into two major infrastructure projects, one of which was awarded to China Harbour Engineering Company. The Minister for Transport, Works and Housing claimed,

“The report from the forensic auditor has unearthed wanton disregard for the conventions and procedures established by the Government of Jamaica for project implementation, administration and management. These breaches of existing procurement guidelines have drained precious budgetary resources and undermined the very foundation of public institutional integrity” (Source: Caribbean Analysis 2012).

  • China Habour Engineering Company negotiated with the Cayman Islands Premier to build and run a major port facility. This deal was stopped, when the UK government blew the whistle over the procurement arrangements. Later it was revealed the process had been fast tracked by the Premier, in violation of legal process (Source: CayCompass 2013).

Perhaps Mr Sogavara and his staff should also read some previous coverage given to China Harbour Engineering on this blog:

PM meets potential Chinese investor

PM’s press secretariat | Solomon Star

Prime Minister Manasseh Sogavare on Wednesday met the general manager of a Papua New Guinea-based Chinese company interested in investing in Solomon Islands.

Mr Ma Jianhua, General Manager of China Habour Company (PNG) Limited, enlightened the Prime Minister about his company which he said is a state-owned enterprise specialised in survey and design, marine engineering and construction of roads, bridges and wharfs.

Mr Jianhua told the Prime Minister his company also provides support to its clients to get financial solutions for their infrastructure development needs.

“I first visited the Solomon Islands two years knew the country has a good investment market for my company.

“We pledge to provide quality service and the best returns for our clients,” he added.

The Prime Minister acknowledged the interest of China Habour Engineering Company.

“We are open to any genuine investor that wants to help us drive our private sector and I am pleased to know that your company is a reputable company doing business in 80 countries including Papua New Guinea,” Mr Sogavare said.

He added that, “Solomon Islands is in dire need to come out from where we are now in terms of development and we have ourselves to blame for restricting ourselves from other potential investors”.

The Prime Minister said there is investment potential in Solomon Islands for the company and he is encouraged to hear that the company can also help its clients access financial solutions for their infrastructure development needs.

“My challenge right now is ensuring developments in Malaita Province but I’m hearing people saying that investors are afraid of going to Malaita.”

MCC not the only major Chinese enterprise on World Bank corruption blacklist

November 17, 2013 3 comments

The PNG government should be wary about its new open door policy towards Chinese companies and loans.

Two years ago Chinese state-owned corporation MCC, operator of the controversial Ramu nickel mine in Madang, was exposed as having been labelled corrupt and blacklisted by the World Bank and other international banks.

MCC is clearly not the sort of company you want pumping millions of tons of toxic mine waste into your pristine marine environments. It is a shame Michael Somare did not do a better job of due diligence before jumping into bed with these particular Chinese!

In April we exposed the criminal antecedents of the China Harbour Engineering Company in Bangladesh, Cayman Islands and Jamaica – but in June Powes Parkop gave the company a K300 million contract!

But it appears the rot in China runs much deeper as MCC and CHEC are far from the only Chinese enterprises blacklisted by the World Bank for corruption and other unsavory practices.

The list also includes:

  • ZHEJIANG ZHEDA INSIGMA GROUP CO. LTD. (INSIGMA GROUP)
  • ZHEJIANG ZHEDA INSIGMA TECHNOLOGY CO. LTD.
  • ZHONGKE LIFE SCIENCE & TECHNOLOGY CO., LTD.
  • HEFEI HIGHWAY & BRIDGE PROJECT CO. LTD
  • DAQING OILFIELD HIGHWAY & BRIDGE ENGINEERING CO., LTD.
  • CHINA COMMUNICATIONS CONSTRUCTION COMPANY LIMITED (as the successor or assign to China Road and Bridge Corporation)
  • CHINA GEO-ENGINEERING CORPORATION
  • CHINA STATE CONSTRUCTION ENGINEERING CORPORATION
  • CHINA WUYI CO. LTD

It is not only the World Bank that has bared these companies for fraud and corruption. The companies are also on the blacklists of the Asian Development Bank, European Bank for Reconstruction and Development, and Inter-American Development Bank.

PNG government beware!

Landholders beware!

Pacific Games Contract Blowout Whiffs of National Provident Fund Fraud

August 21, 2013 16 comments

Pacific Games contractor, China Harbour Engineering Company (CHEC) has been blacklisted by the World Bank for “fraudulent practices”. They have also been found by the Bangladeshi courts to have acquired contracts through bribery.

So when CHEC was handed a massive roads deal (K318 million) by the NCD, PNGxposed’s eyebrows were raised. So were Governor Parkop’s when he discovered through a viral social media campaign what his auditors had not, and he duly suspended the contract.

Now we learn CHEC has been given the contract to build the 2015 Pacific Games village at the University of PNG. According to the Good Governance Advocacy Forum the project is costed at K190 million, yet CHEC was allegedly awarded an astronomical K263 million, that is a K73 million excess. Other contractors we are told bid around K190 million.

The argument that CHEC are a ‘world class’ outfit worth the extra splurge has been definitely torn apart by the Jamaican Minister for Transport, Works and Housing, who following an audit inquiry, reported that CHEC had, “wanton disregard for conventions and procedures established by the Government of Jamaica for projected implementation, administration and management. These breaches of existing procurement guidelines have drained precious budgetary resources and undermined the very foundation of public institutional integrity”.

So why would the PNG government allegedly pay an extra K73 million to a company blacklisted by the World Bank and slammed for shonky work by the Jamaican government?

The answer may lie in another anti-corruption investigation conducted into the National Provident Fund, by esteemed judge Tos Barnett. Here it was alleged that Peter O’Neill, Jimmy Maladina and Herman Leahy conspired to inflate contract costs, and each took cuts of the excess.

Of course, the Pacific Games is being organised under the watchful eye of Justin Tkatchenko. Should we be worried, surely he would not allow untoward graft to take place? If past anti-corruption inquiries are anything to go by, be worried.

In 1999 a Special Investigation into Fraud, Corruption and Financial Mismanagement at the National Capital District Commission, done by TSK International, found that Justin Tkatchenko as Acting City Administrator fraudulently obtained a total of K12,000 through two cheques in the sums of K4,000 and K8,000.

In 2003 the Parliamentary Accounts Committee was asked by Parliament to conduct an investigation into alleged corruption in the Parliamentary Service. The Committee submitted its report in September 2003 after summonsing witnesses and hearing evidence given on oath.

The PAC investigation found Justin Tkatchenko’s company Kitoro No.33 was awarded a K1.5 million contract to maintain parliamentary gardens, in breach of procurement procedure. The Kitoro tender was received 3 months AFTER the closing date. The tender submitted was only for twelve months but a three year contract was awarded. The original contract amount of K490,000 was K190,000 above the limit imposed by the Public Finance Management Act. The lowest bid for the project tender was just K12,000 per year. Kitoro was awarded contract totalling K837,738 that did not go to public tender.

The PAC recommended the contracts with Kitoro No.33 be terminated immediately and the officers responsible for the tendering, awarding and executing of the contract face ‘appropriate action’.

It seems inflated contracts are something of a tradition among NEC colleagues, if the anti-corruption reporting is anything to go by. Perhaps this could explain why a blacklisted Chinese company was gifted K73 million by the PNG government, a gift its own citizens are much more in need of.

Success! Parkop suspends contract with China Harbour Engineering Company

June 27, 2013 1 comment

NCD Governor Powes Parkop has suspended a K318 million contract with the China Harbour Engineering Company. The suspension comes after it was revealed two-weeks ago by PNGExposed that the company was blacklisted by the World Bank and implicated in other corruption scandals.

Read the revelations on PNGExposed that led Governor Parkop to order an investigation.

Read the report on EMTV news about the suspension of the contract.

Watch the video:

Parkop Hands Over K300m to Chinese Multinational Slammed by World Bank for “Fraudulent Practices”

June 17, 2013 8 comments

Last Friday EMTV beamed images of NCD Governor signing a K318 contract with China Harbour Engineering Company to upgrade roads in the nation’s capital.*

What they failed to report is that China Harbour Engineering has been blacklisted by the World Bank!

PNG Exposed reported this in April – no one in the hopelessly muzzled news media bothered to follow up on our lead.

But just in case people need reminding, here is a ‘greatest hits’ list that highlights the company’s disconcerting past:

  • China Harbour Engineering Company’s parent company, and all its subsidiaries (including its PNG subsidiaries), have been blacklisted until 12/1/2017 by the World Bank for all contracts related to roads and bridges, owing to “fraudulent practices” (Source: World Bank 2011).
  • The courts in Bangladesh found that China Harbour Engineering Company paid bribes to the son of the Bangladeshi Prime Minister, who was then sentenced to six years in prison. (Source: The Hindu 2011)
  • In 2012 an Audit was conducted by the Jamaican government into two major infrastructure projects, one of which was awarded to China Harbour Engineering Company. The Minister for Transport, Works and Housing claimed,

“The report from the forensic auditor has unearthed wanton disregard for the conventions and procedures established by the Government of Jamaica for project implementation, administration and management. These breaches of existing procurement guidelines have drained precious budgetary resources and undermined the very foundation of public institutional integrity” (Source: Caribbean Analysis 2012).

  • China Habour Engineering Company negotiated with the Cayman Islands Premier to build and run a major port facility. This deal was stopped, when the UK government blew the whistle over the procurement arrangements. Later it was revealed the process had been fast tracked by the Premier, in violation of legal process (Source: CayCompass 2013).

So it would appear when international firms are exposed by the World Bank and authorities in a diverse range of countries, ranging from Bangladesh through to Britain, they can still earn a fortune in PNG.

Thanks Mr Parkop another job well done.

* See http://www.emtv.com.pg/news-app/item/parkop-signs-road-contracts-for-ncd?category_id=20

Road Contracts awarded to Crooked Companies blacklisted by the World Bank

April 15, 2013 10 comments

Prime Minister O’Neil holds himself out as a moderniser, a leader who plans to centralise and utilise the nation’s vast natural wealth, to build the pillars of a strong, independent national economy, i.e. education, health, roads, transport, infrastructure, industry, technology, law and order. His critics, mostly foreign, stare incredulously at the O’Neill government, as their sweetheart deals dry up.

Yet anyone who has taken the time to seriously glance northwards would know that those nations who have broken with neoliberal dictates, by implementing a strong state-led  development model, that focuses on fostering national industries, are the only countries who have successfully broken the cycle of dependency and poverty. To its credit the O’Neill government stands tall as arguably the first government in PNG willing to give this a serious go; his predecessors have proven all too willing to drink the foreign advisers’ coolaid, while at the same time lining their pockets through corruption and backroom deals.

But serious challenges remain. In particular, the PNG state bears the scars of dependency; a despondent civil service, all too prepared to take brown paper bags full of money – to be fair, with sky rocketing inflation this has become something of a necessity for PNG’s emerging middle class – and a political elite so consumed with frauds and scams, they have sign away the family silver to foreign multinationals for bargain basement prices.

O’Neill must stare down this reality, and combat it with all the resources at his command. One area in which this is particularly vital is roads. Along with telecommunications, utilities and urban planning, a well organised roads networks will be vital to a healthy, independent national economy that benefits not only big capital, but just as importantly – if not more importantly – those millions of small farmers who want to get their goods to market.

Road procurement then is no laughing matter. Accordingly, PNG Exposed has been scrutinising a number of recent contracts awarded to construction companies to build major roads and highways (see Post Courier 12/4/2013 and  18/1/2013). Collectively these awards amount to almost K1 billion. Yes, lets underscore and italicise that figure, K1 billion,  it is a sobering amount.

Sadly, following investigation many of the most lucrative contracts have been awarded to companies slammed for corruption, bribery and fraud by the World Bank, Transparency International, the Auditor General and the Public Accounts Committee. We outline key cases in the table below.

If the Prime Minister is to earn his reputation as a moderniser, roads procurement is a good a place to start as any. Prime Minister, PNG Exposed asks, why is a major artery of PNG’s economic health, being clogged up with contractors who the World Bank won’t touch?

Seizing back control of PNG’s mineral wealth is only one pillar for a truly independent PNG, it is absolutely vital every one of those dollars wrestled from foreign interests is used wisely, prudently and transparently, to fund the critical infrastructure future generations will need to make PNG the great nation it can be.

Company PNG Contract Corruption Allegations
China Harbour Engineering Company PNG Ltd  K318 million for 18.7 km of road.(K196,000,000 – Gerehu, Hanuabada and K122,000,000 – Gerehu, Nine Mile). China Harbour Engineering Company’s parent company, and all its subsidiaries (including its PNG subsidiaries), have been blacklisted until 12/1/2017 by the World Bank for all contracts related to roads and bridges, owing to “fraudulent practices” (Source: World Bank 2011).The courts in Bangladesh found that China Harbour Engineering Company paid bribes to the son of the Bangladeshi Prime Minister, who was then sentenced to six years in prison. (Source: The Hindu 2011)

In 2012 an Audit was conducted by the Jamaican government into two major infrastructure projects, one of which was awarded to China Harbour Engineering Company. The Minister for Transport, Works and Housing claimed, “The report from the forensic auditor has unearthed wanton disregard for the conventions and procedures established by the Government of Jamaica for project implementation, administration and management. These breaches of existing procurement guidelines have drained precious budgetary resources and undermined the very foundation of public institutional integrity” (Source: Caribbean Analysis 2012).

China Habour Engineering Company negotiated with the Cayman Islands Premier to build and run a major port facility. This deal was stopped, when the UK government blew the whistle over the procurement arrangements. Later it was revealed the process had been fast tracked by the Premier, in violation of legal process (Source: CayCompass 2013).

Global Constructions Ltd(Note: Current Works Minister, Francis Awesa, was a Managing Director and major Shareholder at Global Construction Ltd) K85,000,000 for Gordons Industrial Road Stage 2. According to Transparency International (TI), in 2001/2002, the People’s Democratic Movement (PDM) appointed one of its ‘cronies’ CEO of the National Capital District (NCD). TI then note, “The later awarding of a contract to expand the city’s road system to a Global Construction company (GC) immediately after the appointment of the PDM-sponsored CEO, Mr. Kipit, raised several implications, including that of manipulation of the tendering procedures. GC had experience only in the Southern Highlands province and had little exposure to civil engineering in urban cities like Port Moresby. There were also established companies like Curtin Brothers and Barclay Brothers, who had wealth of experience of civil engineering in PNG, but were overlooked for the construction job in the city. GC is also a company rumoured to have substantial share ownership among some members of the ruling PDM party” (Transparency International 2003).In 2002 the Public Accounts Committee found that a NCD road contract bid by Global Constructions Ltd was altered by an NCD official, so Global Construction’s quote was cheaper than its rivals. (Post Courier, 25/10/2002)

It is alleged that Global Constructions was given a K10 million contract in breach of the Public Finance Management Act. (Source: Post Courier 2012)

Global Construction has also been subject to criticism in social media forums, see here.

Paga Hill Development Company(Note: Former Deputy Prime Minister, Michael Nali, is a shareholder in this company) Amount unknown, Paga Hill Ring Road Paga Hill Developent Company’s Chairman and Secretary, Gudmundur Fridriksson, is alleged by the Public Accounts Committee to have acquired a 13.7 hectare plot of land at Paga Hill through “corrupt dealings”. His other company CCS Anvil has been slammed in 2 Auditor General reports and 3 Public Account Committee reports. The most serious accusation involves the alleged theft of K2 million from deceased estates when working for PNG’s Public Curator’s Office. (Source: International State Crime Initiative 2012)