The World Bank Group
       Integrity Vice Presidency




                                   Republic of India

Madhya Pradesh Water Sector Restructuring Project

                                   REDACTED REPORT




                                             December 2014
                            Statement of Use and Limitations

This Report was prepared by the World Bank Group’s (WBG’s) 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, regarding one or more WBG-supported activities.

The purpose of the investigation underlying this Report is to allow the WBG to determine
if its own rules have 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 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 WBG and its officers and employees by its Articles of Agreement and any other
applicable sources of law. The WBG reserves the right to invoke its privileges and
immunities, including at any time during the course of an investigation or a subsequent
judicial or other proceeding pursued in connection with this matter.




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                                   Executive Summary

This report provides the findings of an administrative inquiry (the investigation) by the
World Bank Group’s Integrity Vice Presidency (INT) into allegations that Company A, a
civil works construction company, may have engaged in fraudulent practices in
connection with the bidding process under the Madhya Pradesh Water Sector
Restructuring Project (the Project) in the Republic of India.

INT’s investigation found evidence indicating that Company A submitted false
experience certificates with its bid for a contract under the Project. Specifically, in order
to meet the requirements of the bidding documents, Company A submitted two prior
experience certificates, purportedly issued by Organization A and Organization B. In
response to the inquiries of the Government of Madhya Pradesh and INT, Organizations
A and B stated that they had not issued the certificates.

The World Bank imposed a sanction of debarment with conditional release on Company
A, which extends to any legal entity that Company A directly or indirectly controls.




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Background

The Madhya Pradesh Water Sector Restructuring Project (the Project) in the Republic of
India aims to achieve sustainable growth and poverty reduction in selected river basins by
improving the productivity of water. The Project is financed by an International Bank for
Reconstruction and Development (IBRD) 1 loan.

The Water Resources Department of the Government of Madhya Pradesh (the
Government of Madhya Pradesh) issued an invitation for bids for the “Implementation &
Execution of Water Quality Enhancement Project of Swarn Rekha River in Sindh Basin”
contract (the Contract) under the Project. A civil works construction company, Company
A, was ultimately awarded the Contract. The Government of Madhya Pradesh
subsequently terminated the Contract because of Company A’s unsatisfactory
performance.

Allegations

After the Contract termination, the Government of Madhya Pradesh contacted
Organization A to verify the authenticity of Company A’s prior experience certificates
supposedly issued by Organization A. Organization A informed the Government of
Madhya Pradesh that it had not issued the certificates. The Government of Madhya
Pradesh notified the World Bank.

Methodology

INT’s investigation consisted of a review of Project documents as well as documents and
statements obtained from Organization A and Organization B, the purported issuers of
Company A’s certificates.

Findings

INT found evidence indicating that Company A submitted false experience
certificates with its bid for the Contract.

The bidding documents for the Contract required that bidders provide documentary proof
of experience in works of a similar nature and size for each of the previous five years. In
an attempt to satisfy this requirement, Company A submitted two certificates with its bid,
representing that Company A successfully completed works as a subcontractor for
Organization B. The first certificate, purportedly issued by Organization A, represented
that Organization B had executed “CC lining work of Tandula Main Canal (the CC lining
Contract).” The second certificate, purportedly issued by Organization B, represented
that Company A had executed the CC lining Contract as a subcontractor for Organization
B.
After the termination of the Contract with Company A, the Government of Madhya
Pradesh contacted Organization A to verify the authenticity of the first certificate.

1
  IBRD is one of the five institutions comprising the World Bank Group. IBRD and International
Development Association (IDA) constitute the World Bank. Therefore, IBRD and the World Bank are
used interchangeably throughout this Report.


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Organization A informed the Government of Madhya that it had not issued the certificate
and that the signature on the certificate did not belong to its staff.

INT contacted Organization B to verify the authenticity of the second certificate.
Organization B informed INT that it had not issued the certificate and that the certificate
was not genuine.

Follow Up Action by the World Bank

The World Bank imposed a sanction of debarment with conditional release on Company
A, which extends to any legal entity that Company A directly or indirectly controls.




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