BY MALOU MANGAHAS
Philippine Center for Investigative Journalism
"Cartel managers would anoint contract
winners in advance of bid submission and would designate losing
bidders, who were compensated to cover their costs in bidding."
"Cartel managers told bribers what to bid,
days before the bid submission date, down ‘to the last peso.’"
"Cartel backers thereafter redrafted their
unit bid prices to comport with cartel-mandated total bid
amounts, frequently 20-30 percent in excess of estimates."
"The prearranged bidding was made all the
more evident when, to the final round of bidding in 2006, an
anonymous informant provided investigators with advance notice
of the correct outcome of the third round of bidding before the
bid opening had occurred."
Apart from interviewing 60 witnesses, the INT
said it conducted "in-depth analysis of the three rounds of
bidding" and established that "bids in all rounds showed
abnormally high and unexplained unit and total costs."
This bids analysis yielded, the INT said, the
following findings:
"Bids bore lockstep relations to engineer’s
estimates (i.e., one round’s bids were 31.0 percent, 32.0
percent, 33.0 percent, and 34.0 percent above the estimate)."
"Bids contained numerous, large calculation
errors suggesting last-minute revisions pursuant to cartel
instructions – one bid contained an error in excess of $3.6
million."
"Two bids on a $26 million total contract,
with widely disparate subtotals, totalled to values only $31
apart."
The lowest bids investigated, the report
continued, "were routinely 20-30 percent above cost estimates,
threatening the Bank’s borrower with tens of millions of wasted
dollars had the cartel not been exposed."
The World Bank’s Evaluation and Suspension
Officer, who evaluated the evidence gathered by the INT, later
issued in May 2008 a Notice of Sanctions Proceedings to the
respondent bidders.
But on Jan. 12, 2009, the World Bank
sanctions board decided to impose penalties on only seven
companies:
EC de Luna and Eduardo de Luna, debarred
indefinitely from participating in World Bank-funded projects.
China Road, debarred for five years.
China State and China Wu Yi, debarred for
four years.
Cavite Ideal and CM Pancho, debarred for four
years.
In August 2008, the Korean firm Dongsung was
separately debarred for four years, "for fraudulent and corrupt
practices in relation to the NRIMP-1 case."
According to the Bank’s sanctions board, the
INT had not presented sufficient evidence that the respondents
may have engaged in "fraudulent practices separate from
collusion."
In its report, however, the INT said it had
"direct evidence of fraudulent or corrupt practices such as the
submission of fraudulent documents or the payment of bribes
derived from admissions of participants or the direct testimony
of witnesses," and "circumstantial proof of collusion detected
through an analysis of the fraudulent bids the cartel
submitted."
"At a minimum, the totality of the evidence
reflects that each of the bidders on the contract packages at
issue had knowledge of the cartel’s practices and willingly
participated in the systemic fraud and corruption," the INT
said.
The "evidence accumulated in this case," it
said, "is sufficient for a determination that the respondents
violated Bank procurement guidelines."
Still, it admitted that the evidence
collected "does not reveal any exculpatory factors" or "any
further mitigating factors" to be considered in the case, in
favor of any of the respondents.
The INT said, it determined that "among the
aggravating factors to be considered are: the egregiousness of
the misconduct, including multiple instances of misconduct; the
degree of involvement of the respondents in the misconduct;
damage caused by the respondents to the credibility of the
procurement process; and harm caused to the borrowers."
Thus, it said, "without exception, it is the INT’s contention
that all of the respondents... acted in a manner that permits
the charge of engaging in corrupt practice to be leveled against
them as a principle (sic) or, in the alternative, as a secondary
party."