Republic of Liberia

Accelerated Electricity Expansion Project

                  Redacted Report




                              November 2020
                                Statement of Use and Limitations

This strictly confidential report (the Report) was prepared by the World Bank Group (the “WBG”)
Integrity Vice Presidency (“INT”). It provides the findings of an INT administrative inquiry (the
“Investigation”) into allegations of corrupt, fraudulent, collusive, and/or coercive practices, as
defined by the WBG for the purposes of its own policies, rules and procedures (the “WBG’s Anti-
corruption Framework”), in relation to WBG-supported activities. The purpose of the
Investigation was to allow the WBG to determine if the WBG’s Anti-corruption Framework had
been violated.

This Report is being shared to ensure that its recipients are aware of the results of the INT
Investigation. However, in view of the specific and limited purpose of the Investigation underlying
this Report, this Report should not be used as the sole basis for initiating any administrative,
criminal, or civil proceedings. Moreover, this Report should not be cited or otherwise referred to
in the course of any investigation, in any investigation reports, or in any administrative, civil, or
criminal proceedings.

This Report is provided without prejudice to the privileges and immunities conferred on the
institutions comprising the WBG and their officers and employees by their respective constituent
documents and any other applicable sources of law. The WBG reserves the right to invoke these
privileges and immunities, including at any time during the course of an investigation or a
subsequent judicial, administrative or other proceeding that your authorities may pursue in
connection with this matter. These privileges and immunities cannot be waived without the prior
express written authorization of the WBG.




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                                      Executive Summary

This report provides the findings of an administrative inqui1y by the World Bank Group Integrity
Vice Presidency ("INT") into allegations of misconduct in connection with the Accelerated
Electricity Expansion Project (the "Project") in the Republic of Liberia.

A joint venture between Group A Co., Ltd. (Group A) and Group B Co., Ltd. (Group B)
(collectively, the "Joint Venture") bid for a Project-financed contract (the "Contract"). Bidders
were required to submit manufacturer authorization fo1ms for major items not produced by the
bidder, showing that the bidder was authorized by the manufacturer of those items to supply and
install them in country.

Evidence indicates that the Joint Venture submitted falsified manufacturer authorizations in its bid
for the Contact.

The World Bank imposed the sanction of deba1ment with conditional release on Group B.




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Background

The International Development Association (“IDA”) and the Republic of Liberia entered into a
Financing Agreement for the Accelerated Electricity Expansion Project (the “Project”) in the
Republic of Liberia. The Project became effective in November 2013 and is scheduled to close
in April 2022.

The Project’s development objectives are to increase access to electricity and strengthen
institutional capacity in the electricity sector in the country. The Project consists of three
components: (i) extension of electricity transmission and distribution systems; (ii) construction
of facilities for off-loading, transport, and storage of heavy fuel oil (“HFO”) and support for
optimization of HFO procurement; and (iii) support for the expansion of supply options and for
the strengthening of the sector’s institutional capacity. The Project is implemented by the
Liberia Electricity Corporation (“LEC”) and the Ministry of Lands, Mines, and Energy.

As part of the first component, the LEC issued an invitation for bids and the Bidding Document
for the Project-financed contract (the “Contract”) in May, 2015. In May, 2017, a joint venture
between Group A Co., Ltd. (Group A) as lead partner and Group B Co., Ltd. (Group B)
(collectively, the “Joint Venture”), submitted its bid for the Contract.

Allegations & Methodology

In September 2017, after the Joint Venture’s bid had been declared the lowest priced bid to meet
the Bidding Document requirements, the LEC received a complaint alleging that the Joint
Venture had submitted a falsified manufacturer authorization. The LEC tasked a special
committee with inquiring into the matter. The special committee found indications that the Joint
Venture submitted falsified documents. The LEC referred the matter to the World Bank.

INT reviewed relevant documents and communicated with Group A and Group B regarding the
findings discussed in this report.

Findings

       Evidence indicates that the Joint Venture submitted falsified manufacturer
       authorizations in its bid for the Contact.

The Bidding Document required bidders to submit manufacturer authorization forms for major
items not produced by the bidder, showing that the bidder was authorized by the manufacturer of
those items to supply and install them in country.

The Joint Venture proposed in its bid, among other things, to supply information technology and
computing equipment from Company A and Company B. To comply with the Bidding
Document requirement, the Joint Venture included in its bid two manufacturer authorizations,
both dated April 2017, purportedly from Company A and Company B.



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Evidence indicates that Group A and Group B agreed that Group A, as lead partner, would
prepare the bid material, but that Group B would offer assistance, including securing
manufacturer authorizations from Company A and Company B.

INT sought verification of the authorizations from both companies, and both confirmed that the
authorizations were falsified. Further evidence indicates that, while Group B did belatedly
request a manufacturer authorization from Company A, it was not issued until November 2017,
six months after the bid submission deadline.

In response to INT’s inquiries, Group B stated that its employee responsible for bid preparation
had modified official, genuine manufacturer authorization letters previously issued by Company
A and Company B for other projects. Evidence indicates that the falsified manufacturer
authorizations submitted with the Joint Venture’s bid were, indeed, modified manufacturer
authorization letters previously issued by Company A and Company B for other projects.
Evidence indicates that, following INT’s inquiries, Group B requested a manufacturer
authorization from Company B, which it issued in March 2018.

Group A, also in response to INT’s inquiries, stated that the falsified documents were solely and
independently prepared by Group B, and that Group A was not involved in their preparation, nor
was it aware of their falsity. Group A admitted that it failed to discover and prevent the
misconduct of its partner, and therefore agreed to take on any appropriate responsibility or
liability.

Corrective Action

The World Bank imposed the sanction of debarment with conditional release on Group B.




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