Argentina

Urban Transport in Metropolitan Areas 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 Urban Transport in Metropolitan Areas Project (the “Project”) in Argentina seeks to
improve the quality and sustainability of urban transport systems in metropolitan areas in
Argentina.

The Project Implementation Unit (the “PIU”) selected a consortium (the “Consortium”) of
Company A and three other companies for award of a Project contract (the “Contract”). A
Director from Company A (“Individual A”) was one of the JV’s Legal Representatives and
its Project Manager.

In the Consortium’s technical proposal submitted for the Contract, Individual A proposed
including two consultants (“Consultant 1” and “Consultant 2”).

Allegations & Methodology

The PIU received allegations of fraud and corruption against the Consortium, and
subsequently, canceled the Contract. World Bank operations staff alerted INT to these
allegations.

In its administrative inquiry, INT reviewed relevant documents, contacted the
representatives of purported Consortium clients, and interviewed Project officials,
Consortium management, and Consortium employees.

Findings

   Evidence indicates that Individual A, on behalf of the JV, billed close to
   US$ 200,000 for two consultants who were never retained under the Contract.

The Contract provided that the Consortium would invoice approximately US$40,000 per
month for Consultant 1’s services, a total of about US$400,000 for the duration of the
Contract, and approximately US$25,000 per month for Consultant 2’s services, a total of
about US$250,000 for the duration of the Contract. The Contract defined the services
Consultants 1 and 2 would provide.

Evidence indicates that 12 of the 28 invoices that the Consortium submitted were supported
by Advance Certificates indicating services rendered by Consultant 1 and Consultant 2.
Evidence further indicates that 14 monthly reports issued by the Consortium claimed that
Consultant 1 and Consultant 2 had performed services under the Contract. Payment
records indicate that the Consortium billed and was paid approximately US$120,000 for
services purportedly rendered by Consultant 1 and approximately US$75,000 for services
purportedly rendered by Consultant 2.

However, evidence indicates that the Consortium never retained Consultant 1 or Consultant
2 under the Contract. Evidence indicates that, six months before Contract signature,
Consultant 1 notified Individual A that s/he was no longer available to work on the
Contract. Evidence indicates that Consultant 2 was under the impression that the
Consortium had not been awarded the Contract, as Individual A had failed to inform
him/her of Contract award. Evidence indicates that Individual A ceased communicating

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with Consultant 2 shortly after contract signature. Individual A told INT that the
Consortium had, in fact, never retained the Consultants’ services.

Evidence suggests that Individual A did not specifically inform the other Consortium
partners of Consultant 1’s and Consultant 2’s unavailability.

Corrective Action

The World Bank imposed the administrative sanction of debarment on Individual A,
extending to any entity he/she controls directly or indirectly.




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