Good governance thrown over the bridge

MaltaToday's revelation that China Communications Construction Company - the company which signed a Memorandum of Understanding with the Maltese government to conduct a feasibility study of a bridge linking Malta and Gozo - is presently blacklisted by the World Bank raises a number of questions on the new government's credentials on good governance.

The revelation appeared in news story reported exclusively by MaltaToday portal, which was conveniently ignored by State TV organ PBS.

While in opposition, the Labour Party had justly criticised Enemalta under a Nationalist government for commissioning German-owned Lahmeyer International as an energy consultant after being blacklisted by the World Bank until 2013 after it was found guilty of corruption. The only difference between the two cases is that the Chinese company is not being paid for its services - something which in itself raises more questions - and that in the case of Lahmayer International, the company actually went through the tendering process without anyone mentioning or realising Lahmayer was blacklisted. Still, both governments have sinned against good governance by entering into agreements with a blacklisted company. In this case, the damage to the government's credibility was even greater because the agreement was signed in the presence of the Prime Minister and carries the signature of deputy Prime Minister Louis Grech.

The OPM did not confirm whether it was aware that China Communications Construction Company was blacklisted before MaltaToday revealed this on Monday.  This raises questions on whether the government carried out due diligence on the company's track record before signing this agreement.  

If the government was aware of the company's track record and still signed the memorandum of understanding with the Chinese company, it is an indication that the government has already dropped its guard when it comes to dealings with companies with a questionable track record.  If the government was not aware of the company's track record, it is guilty of gross incompetence, as it did not bother to check.

A simple Google search on the internet would have shown that the company is not only blacklisted by the World Bank, but that it was also implicated in legal cases in Bangladesh, China and Malaysia and faced serious allegations in Guyana and Jamiaca. 

More damning still is the government's decision not to withdraw the Memorandum of Understanding with the Chinese company after MaltaToday made its blacklisted status public.

But even more troublesome is the OPM's admission that the deal with the company is part of some wider deal with the Chinese government. Replying to MaltaToday's questions, an OPM spokesperson revealed that it was not the company which originally approached the Maltese government, but the Chinese government. According to the OPM, the Chinese government offered its expertise to conduct the said feasibility study for a bridge between Malta and Gozo through China Communications Construction Company.

In view of Chinese interest in the new energy infrastructure where another Chinese government owned company is also a bidder, the €4 million donation by CCCC takes another dimension. It could well be perceived that China is using its soft power diplomacy and generosity to influence decisions in Malta. China is famous for using its generosity in the pursuit of its geopolitical interests in Africa, Asia and Latin America. But its largesse comes at a price, which includes corruption, political leverage and support for dictatorships in countries like Sudan and Myanmar. 

The 2011 Bribe Payers Index by the reputable Transperancy International ranks 28 of the world's largest economies according to the perceived likelihood of companies from these countries to pay bribes abroad. It concludes that companies from Russia and China which invested US $120 billion overseas in 2010 are seen as most likely to pay bribes abroad. This should be enough to raise the alert of the Maltese government.

The government insists that it has no strings attached with the Chinese construction company and will go through tendering procedures once a decision is taken on whether to go for any form of connection between Malta and Gozo or not.

In the interest of transparency, the government should at least exclude the Chinese company, which is presently conducting the feasibility study from bidding in any eventual tender for the building of a bridge to Gozo.

The government insists that it is still committed to ensure that every international company, which will be entering a government tendering process, will be asked to declare if it was blacklisted or found guilty of corruption by international institutions such as World Bank, the EU or European Investment Bank or any other jurisdiction from another country. The question is: will it be in a position to exclude such companies when it is faced by actual bids?