September 26, 2020

Bush is still happy with CHEC. Issues statement

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Statement from the Office of the Premier on Reports of CHEC Debarment by the World Bank

The Cayman Islands Government has looked into news reports that China Harbour Engineering Company (CHEC) was debarred by the World Bank; and has found no evidence that CHEC committed any misconduct or illegal acts that resulted in sanctions by the World Bank. Our research found that China Communications Construction Company (CCCC) and all its subsidiaries were debarred from World Bank funded projects as a result of CCCC becoming the designated successor to China Road and Bridge Corporation (CRBC).

Our understanding is that this action is a follow-on from a 2002 project in which CRBC was involved. CCCC was deemed by the World Bank as “designated successor” under new World Bank rules that prescribed that successor organizations would be subject to the same sanctions applied against the original firm.

A press release on the World Bank website dated July 29, 2011 says, “This action is based on recent changes in the World Bank sanctions system to clarify that successor organizations – through purchase or reorganization – will be subject to the same sanctions applied to the original firm.”

Accordingly, the press release goes on to say, “CCCC is the designated successor entity to China Road and Bridge Corporation (CRBC) which, along with six other firms and one individual was debarred by the World Bank for eight years, beginning January 12, 2009”.

It is evident that CHEC is far removed from any wrongdoing that resulted in the original sanctions placed on CRBC by the World Bank. The far reaching effect of the World Bank debarment of CRBC only relates to CHEC because it is a subsidiary of CCCC which inherited the debarment from its predecessor. Neither CHEC nor its parent company CCCC has been sanctioned by the World Bank for fraud or any other misconduct actually committed by those companies.

In view of these findings, CIG does not see cause to believe that CHEC is legally or morally responsible for the actions which led to the original debarment of China Road and Bridge Corporation by the World Bank. There is therefore no indication that valid grounds exist for discontinuing our dealings with CHEC.

Given the many years of discussing and negotiating the port project, this Government believes that CHEC offers the best value for money to the Cayman Islands; namely because CHEC is the only company to offer the Islands terms that would enable us to attain realistic value for the leveraging of our assets.

The Cayman Islands Government remains vigilant and will only conduct business with companies that can pass the closest scrutiny. CIG has conducted and will continue to conduct appropriate due diligence before any binding final agreements are signed.

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