World Bank Imposes Sanctions on Four Firms

More than a year after the World Bank declared misprocurement on a massive military demobilization project and de­manded the return of $2.8 million from the government, the agency announced it has passed sanctions against a number of firms for fraudulent practices.

The World Bank debarred five individuals and four companies for terms ranging from one to five years, effectively making them ineligible to receive World Bank contracts during those periods, according to a statement Mon­day.

Aiming to demobilize 30,000 soldiers from Cambodia’s bloated military, the World Bank project ran into obstacles even before it declared misprocurement. Re­ports circulated of “ghost soldiers,” bribes paid to get on demobilization lists and complaints about the poor quality of compensation package goods.

Then, in June 2003, the bank found that a $6.9-million government contract for the supply of motorbikes had been awarded to a company that did not meet bid requirements. In response, the World Bank reduced the initial $18.4 million loan to $12.1 million and required the government to repay $2.8 million of the contract.

The bank is still waiting for repayment of $2.7 million, financial management reports and an independent audit report, according to Monday’s statement.

World Bank officials could not be contacted on Wednesday, but an official with the project said in September that the second phase of the demobilization effort had never started due to a lack of interest by the government.

Credit for the project is due to expire in December.

Until now, neither the World Bank nor the government has released information about the parties involved in the misprocurement case. And Monday’s statement, which names firms and individuals, still does little to explain their roles in the scandal.

Thales Engineering and Con­sulting SA, a large French-based firm hired by the government to oversee the procurement pro­cess, was one of the companies to be sanctioned. While the firm has been debarred for only one year, it hired an individual procurement expert from France, Jeremy Purce, who was debarred for five years “on the basis of multiple misrepresentations of facts,” the bank’s statement said.

Four other individuals and three other firms were debarred for three years. Two of those firms, SPLJ Group and Cambodia Royal Auto Manufacturing Co Ltd are based in Phnom Penh. The other, Jiangmen Zhongyu Motor Group Co Ltd, is located in Jiangmen City, China, according to the statement.

Opposition lawmaker Son Chhay, who conducted his own investigation of ghost soldiers in the demobilization project and has followed the misprocurement issue, said he was disappointed with the World Bank’s previous lack of cooperation on the case.

The bank must take more effective action to ensure that there is an independent investigation of the contested contract, he said.

Instead, he said, a veil of secrecy has surrounded the case since the agency declared misprocurement. Despite repeated requests for details from the World Bank, he has received no replies, Son Chhay said.

“If they really, seriously want to promote transparency and accountability, they must share information,” he said.


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