The World Bank and its partners have banned three PricewaterhouseCoopers (PwC) subsidiaries in Africa from their projects for 21 months over corruption charges admitted by the firms.The trouble for PwC Associates Africa Ltd based in Mauritius, PwC Limited Kenya, and PwC Rwanda Limited rose after they admitted to fraudulently obtaining confidential bid information for a USD 1.1 billion (UGX 41.6 trillion) Ethiopia-Kenya electricity interconnection project.
The financier deemed this as providing an unfair contract advantage to the PwC companies, according to a press release by the World Bank. This 1,068-km high-voltage transmission line is part of the Eastern Africa Power Pool, and this particular line is aimed at exporting electricity from Ethiopian hydropower plants to Kenya and beyond.
The Eastern Africa Power Pool (EAPP), is a collaborative effort by eleven countries in Eastern Africa to interconnect their electricity grids and take advantage of excess capacity within the network and facilitate trade of electric power between the members.
The others are Burundi, Democratic Republic of Congo, Djibouti, Egypt, Libya, Rwanda, Sudan, South Sudan Tanzania and Uganda.The project is aimed at addressing chronic power shortages in East Africa amid growing demand which is projected to grow by between 6 and 8 percent annually, according to World Bank estimates.The World Bank has zero-tollerance policy on corruption that includes acts aimed at influencing contract awarding processes, and has debarred more than 1,000 entities since 2011 for similar violations.
This move on PwC is not only likely to limit its revenue from the region’s donor-funded work, but may also lead to possible heightened scrutiny on Big Four (with Deloitte, Ernst & Young (EY) and KPMG) firms in African infrastructure bids.Following the investigations and subsequent charge, the PwC entities admitted culpability for collusive and fraudulent practices related to the electricity project subsidiaries, leading to the disbarment.
A negotiated settlement was reached between the Bank and the three companies, whose cooperation saw the penalty limited to only 21 months, with an early release possible depending on the conditions by WB.In the settlement deal, PwC agreed to conducting an internal investigation, taking internal disciplinary action against responsible parties, ceasing business relationships with involved sub-consultants and, providing staff training.
Other remedial actions PwC committed to are voluntarily refraining from bidding on World Bank-financed contracts during the negotiations, and committing to strengthen their integrity compliance programs to align with WB standards. According to the Bank’s report, these actions and the firm’s collaboration with the investigations, contributed to the shorter debarment and conditional release terms.The debarment of the PwC entities extends to other financing partners in the project: African Development Bank which provide about USD 354 million, and the Agence Française de Développement (AFD).
World Bank in UgandaThe World Bank has previously debarred several companies and individuals in connection with projects in Uganda too after investigations into sanctionable activities like fraud, corruption, or misrepresentation in projects, like energy, roads, rural electrification, and lcal private sector development initiatives.
They include Burhani Engineers Ltd -a Kenya-based engineering and construction firm for 24 months in 2023 for misrepresenting prior experience to get contracts in the Energy for Rural Transformation III Project in Uganda.In January 2014, Energoprojekt Niskogradnja, Serbian civil engineering company was debarred for two and a half years in January 2013, for fraudulent practices said to have impacted a roads and development project in in the country.
A Ugandan Company, Emmyways Engineering/Construction Limited was debarred for 3 years (with conditional release) in June 2019, over misconduct in a World Bank-financed project in Uganda. Others in lists and reports include Pioneer Construction Ltd and Charles Kyenkya, debarred around 2014 for periods up to 2021, due to procurement malpractices, B.V.S. Construction Ltd and Jayaram Reddy debarred in 2012 for similar reasons.
These debarments make the affected parties ineligible for World Bank-financed contracts during the specified periods, often as part of settlement agreements requiring integrity compliance reforms. URN