Peru

Decentralized Rural Transport Project

                   Redacted Report



                                July 2019
                            Statement of Use and Limitations

This 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 purposes of its own policies, rules and procedures (the “WBG’s
Framework regarding Anti-corruption”), in relation to the WBG-supported activities. The
purpose of the Investigation was to allow the WBG to determine if the WBG’s Framework
regarding Anti-corruption has 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 its privileges and immunities, including at any time during the course of an
investigation or a subsequent judicial, administrative or other proceeding pursued in
connection with this matter. The WBG’s privileges and immunities cannot be waived
without the prior express written authorization of the WBG.




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Background

The Decentralized Rural Transport Project (the “Project”) in Peru aimed to improve the
access of rural households and entrepreneurs to goods, social services and income-
generating opportunities through, among other things, reduced transport costs and better
rural transport infrastructure. The Project became effective in July 2007 and closed in
December 2013. It was co-financed by the Government of Peru, the Inter-American
Development Bank, and the International Bank for Reconstruction and Development
(“IBRD”).


The Government of Peru established a Project Implementation Unit (the “PIU”) under the
Ministry of Transportation and Communication. In 2011, the PIU advertised for a Project-
financed Contract (the “Contract”). A Consortium (the “Consortium”) comprised of two
companies—Company A, owned by Owner A, and Company B, owned by Owner A’s
sibling, Owner B—bid for the Contract.

Allegations & Methodology

The PIU informed the World Bank that the Consortium might have submitted a false bank
guarantee purportedly issued by a commercial bank abroad. The World Bank Group
Integrity Vice Presidency (“INT”) was informed of the matter.

INT’s investigation consisted of, among other things, a review of Project documents as
well as documents and statements obtained from the Commercial Bank and Owner B.

Findings

   1. Evidence indicates that the Consortium submitted a falsified bank guarantee in
      its bid for the Contract.

Bidders for the Contract were required submit a bank guarantee that was executable in Peru
and issued by a bank subject to the Superintendence of Banks in Peru. Bidders were
notified that the PIU reserved the right to verify the authenticity of all the documents
submitted, and that bidders could face disqualification for submitting falsified documents.
Evidence indicates that the Consortium submitted a bank guarantee purportedly issued by
a commercial bank located abroad (the “Commercial Bank”). During the bid evaluation
stage, the PIU contacted the Commercial Bank, which informed the PIU that it had not
issued the bank guarantee submitted by the Consortium. During an interview with INT,
the Commercial Bank also confirmed to INT that it had not issued the bank guarantee
submitted by the Consortium.

   2. Evidence indicates that Company A falsely claimed Company B’s participation
      in the Consortium.

INT sent messages to Owner A and Owner B outlining the above findings. Owner B
responded that he/she was unaware of the existence of the Contract or the Consortium.
According to Owner B, the signature contained in the Consortium agreement was not
his/hers, and he/she did not give his/her sibling, Owner A, authorization to sign a document

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on his/her behalf. Owner A did not respond to INT’s letter. However, Owner B forwarded
a letter addressed to INT and signed by Owner A in which Owner A stated that he/she had
inserted Owner B’s signature on the Consortium agreement without his/her permission.

Corrective Actions

The World Bank imposed the sanction of debarment with conditional release on Company
A and Owner A. This extends to any legal entity Company A or Owner A directly or
indirectly controls.




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