The World Bank Group has announced a 21-month ban of PwC firms in Kenya and Rwanda over fraud and collusion linked to a major regional electricity project.
In a statement on Wednesday, March 18, the bank said the decision relates to misconduct in the Eastern Electricity Highway Project under the Eastern Africa Power Integration Program in Ethiopia.
"The World Bank Group (Bank Group) today announced the 21-month debarment with conditional release of Mauritius-based PricewaterhouseCoopers Associates Africa Ltd. (PwC Associates), PricewaterhouseCoopers Limited, Kenya (PwC Kenya), and PricewaterhouseCoopers Rwanda Limited (PwC Rwanda), in connection with collusive and fraudulent practices as part of the Eastern Electricity Highway Project under the First Phase of the Eastern Africa Power Integration Program in Ethiopia," the statement read.
World Bank Group explained that the project was meant to improve electricity supply in Kenya while enabling Ethiopia to earn revenue through power exports.
"The project was designed to increase the volume and reduce the cost of electricity supply in Kenya; and to provide revenues to Ethiopia through the export of electricity from Ethiopia to Kenya," the statement added.
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According to the findings, PwC Kenya, PwC Rwanda, and their affiliate accessed confidential procurement information in 2019 and used it to improperly influence the award of consultancy contracts, including those linked to financial reporting standards and asset valuation for Ethiopian power agencies.
The bank further revealed that the firms misrepresented key details during the execution of one of the contracts, including the qualifications and availability of experts and disclosure of subcontractors.
"Additionally, during the selection and execution of the EEU FAIR Contract, PwC Associates misrepresented the availability, qualifications, and employment status of key experts, and failed to fully disclose all subconsultants. This conduct constitutes collusive and fraudulent practices under the Bank Group Consultant Guidelines," the statement continued.
The bank clarified that the ban makes the firms and their controlled affiliates ineligible to participate in World Bank-financed projects, and that the companies admitted wrongdoing as part of a settlement.
"The debarment makes PwC Associates, PwC Kenya, PwC Rwanda, and any affiliates they control ineligible to participate in Bank Group-financed projects and operations. It is part of a settlement agreement under which the three companies admit culpability for sanctionable practices," the statement further read.
World Bank Group explained that the 21-month ban was reduced due to the companies’ cooperation, admission of misconduct, and steps taken to address the issues, including internal investigations and staff training.
"The settlement agreement provides for a reduced period of debarment in light of the companies’ admission of misconduct, cooperation, strengthening of aspects of their existing integrity compliance program, and voluntary remedial actions-including an internal investigation, internal action against responsible parties, ceasing business with all involved subconsultants, staff training, and voluntary restraint from bidding for Bank Group-financed contracts during the settlement agreement negotiations," the statement explained.
As part of the agreement, the bank said the firms are required to strengthen and implement integrity compliance programs in line with World Bank guidelines before they can be reinstated.
The bank also noted that the PwC Africa coordinating entity signed the agreement in a non-sanctioned role due to its oversight responsibilities, and that all firms committed to continued cooperation.
"The entity that provides coordination and oversight to PwC network firms in Africa, PricewaterhouseCoopers Africa Limited, signed the agreement as a non-sanctioned party, because it has oversight for the compliance of its members, including PwC Associates, PwC Kenya, and PwC Rwanda. The companies also commit to continue to fully cooperate with the Bank Group Integrity Vice Presidency," the statement concluded.
This development comes weeks after the World Bank dismissed a statement circulating online purporting to reaffirm the bank’s partnership with the government on the National Youth Opportunities Towards Advancement (NYOTA) programme.
In an update on Wednesday, February 11, the World Bank flagged the statement as fake, clarifying that no such statement has been issued.
"The World Bank Kenya wishes to clarify that the news release currently circulating regarding an alleged response to concerns about the NYOTA program is fake. No statement of that nature has been issued by the World Bank Kenya," read the statement in part.
NYOTA also dismissed the statement, saying it did not originate from the World Bank.
NYOTA urged members of the public to disregard the fake statement, which is circulating widely on social media
"This document is fake and should be disregarded. The World Bank has not issued any official communication or statement in relation to this matter," NYOTA stated.
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