The World Bank has sanctioned three companies, Africa Railways Logistics Ltd (2 years), Africa Railways Ltd and Rift Valley Railways Kenya for connection to corruption in a World Bank funded railway project with the latter two, sanctioned on a conditional non-debarment basis.
“The World Bank announced the debarment of Africa Railways Logistics Ltd for two years in connection with an employee’s attempt to improperly influence the customs and port clearance process for locomotives that were part of two investment projects by the International Finance Corporation (IFC) the private sector arm of the World Bank Group,” said the World Bank in a statement.
Sanctioning and debarment of companies is a disciplinary and determent measure used by the World Bank and other international lending institutions such as the African Development Bank in cases where companies have engaged in fraudulent practices. A conditional non-debarment requires companies to comply with remedial or preventive conditions in order to avoid debarment, where else a debarment stops companies from transacting with the World Bank for a fixed period and can be based on set conditions or not.
“Two related companies; Africa Railways Ltd and Rift Valley Railways Kenya (RVR) were sanctioned with conditional non-debarment. An employee of RVR Kenya, who also owned a subcontracted company, both failed to disclose his ownership interest in the company and attempted to improperly influence the customs and port clearance process for the locomotives which is a corrupt practice,” said the bank.
The section is as a result of World Bank Ethics and Audit report released in 2017, where the bank found that the Rift Valleys Railways Group (RVR) and its executives had engaged in fraudulent practices in the procurement, financing, and import of Railways locomotives. The International Finance Corporation-a branch of the world operating within the private sector had loaned RVRK $22 million for the purchase of 20 locomotives in 2014 which was the subject of the investigation.
Sanctioning of companies operating in Kenya by the World Bank is not new, in 2012 Oxford University Press East Africa Limited was barred for three years for corrupt practices in order to win a textbooks supply contract funded by the World Bank-funded. Minimix Agencies was debarred for three years in 2016 after being found to have submitted forged Manufacturers Authorization Letters in a contract bid for a billing system.