World Bank bans Chinese firm for defrauding Zambia in a Zesco electrify deal

The World Bank has banned a Chinese firm named Jiangsu Zhongtian Technology Ltd (ZTT), a company that manufactures and distributes fiber optic cable, in connection with fraudulent practices under the Lusaka Transmission and Distribution Rehabilitation Project in Zambia.

The 20 months ban means ZTT is now ineligible to participate in World Bank-financed projects and cannot trade with any other multilateral development bank or related projects, after it admitted to defrauding the Zambian government in a Zesco deal.

In 2013, the Zambian government acquired a US$210 million loan from the World Bank and European Investment Bank for the Electricity Transmission and Distribution System Rehabilitation Project in Lusaka. According to the project report, the World Bank loaned Zambia US$105 million, and the European Investment Bank pumped in US$65 million while the Zambia government contributed US$40 million.

The objective of the project was to increase the capacity and improve the reliability of the electricity transmission and distribution system in Lusaka. The project involved reinforcing and upgrading the power transmission and distribution infrastructure to improve the electricity network for consumers throughout the area.

On November 20, 2017, Ministry of Finance, Ministry of Energy and Zesco signed a sub component contacts with the Chinese company (ZTT) to construct 132kv overhead power lines from Lusaka MFEZ to the waterworks area, Leopards hill to Roma, Lusaka West to Industrial and Industrial to Coventry Line.

The contract price for the ZTT lot was US$11.1 million, but according to an investigation, the company won the tender using fortified documents, a revelation that has forced the World Bank to impose sanctions on the Chinese company.

“According to facts of the case, ZTT misrepresented its past contract experience by submitting falsified documents in its bid for the contract, which is a fraudulent practice. The ban is part of a settlement agreement under which the company acknowledges responsibility for the underlying sanctionable practices, and agrees to meet specified corporate compliance conditions as a condition for release from debarment,” reported the World Bank.

“As a condition for release from sanction under the terms of the settlement agreement, the company commits to developing an integrity compliance program consistent with the principles set out in the World Bank Group Integrity Compliance Guidelines. The company also commits to continue to fully cooperate with the World Bank Group Integrity Vice Presidency. The debarment of ZTT qualifies for cross-debarment by other multilateral development banks (MDBs) under the Agreement for Mutual Enforcement of Debarment Decisions that was signed on April 9, 2010.”

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Richard
Richard

very shameful,this government doesnt have the heart and interest for zambians the earlier zambians wake up the better

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