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ADB halts graft-laden single window project of Maldives' Economic Ministry

Fathmath Shaahunaz
07 September 2020, MVT 14:50
Finance Minister Ibrahim Ameer (L) and Economic Minister Fayyaz Ismail attend the Maldives Monetary Authority (MMA)'s 38th anniversary celebration ceremony in 2019. FILE PHOTO: HUSSAIN WAHEED / MIHAARU
Fathmath Shaahunaz
07 September 2020, MVT 14:50

In an unprecedented first in Maldives, the Asian Development Bank (ADB) has halted the USD 6.7 million (MVR 100 million) National Single Window project of the Ministry of Economic Development, as it was handed over to an ineligible contractor on suspicious grounds.

Marking the first time that a major international organisation has stopped a project in Maldives, local media Mihaaru reported that ADB ordered local authorities to investigate the matter and re-open the project for bid.

Funded by ADB, the single window project, which aims to link the economic ministry with the services of other trade institutions across one network, was tendered by the Ministry of Finance and contracted to Webb Fontaine Asia Inc.

However, according to a case lodged at the Anti-Corruption Commission (ACC) by a private entity last year, the project’s contractor did not meet the requirements specified in the tender.

One of the key points highlighted in the case was that Webb Fontaine Group had submitted its project proposal and documents under Webb Fontaine Asia Inc, its branch in the Philippines. However, the project’s workings were to be undertaken by its main office headquartered in Dubai, the United Arab Emirates (UAE). The UAE is not among the 68 countries listed in the finance ministry's bid document, whereas the Philippines is included. Subject 4.2 of the bid document clearly states that firms from any countries not included in the list are not eligible.

After Mihaaru and The Edition brought the issue to light in March this year, ADB conducted a due diligence report and internal audit of the contractor, as per Mihaaru.

The bank identified violations of its anti-corruption policy in the project's handover, and subsequently ordered the Maldivian government to tender the project again.

The National Tender Board has since cancelled the current project.

ADB is notable for its strict policy and actions against deceit and corruption, which include rejection of proposals that win bids through duplicitous means, and banning such firms from bidding for any projects funded through ADB for certain periods of time.

Govt to cancel contract with Webb Fontaine

Following Mihaaru's written enquiries to the finance ministry and Tender Board regarding the project handover, the ministry revealed that the government has decided to terminate its contract with Webb Fontaine.

The ministry's reply in writing to Mihaaru, as verified by The Edition, reads that following the media reports in March, the finance ministry and ADB collaboratively carried out a procurement process assessment on the awarding of the National Single Window's turnkey contract.

Noting that the procurement assessment report has been finalised, the finance ministry stated that following consultations with ADB regarding the report findings, the government decided in August to terminate the contract with Webb Fontaine.

The ministry added that it was working with ADB on the process of ending the agreement, and that further information on the turnkey contract will be shared with the media soon.

However, the ministry did not detail how the project was contracted to Webb Fontaine in the first place nor how the government will proceed with it in the future.

It is of note that the economic ministry's project was awarded to Webb Fontaine by a technical committee which represented all the institutions relevant to the National Single Window. Reportedly, the committee includes representatives from the economic ministry, Maldives Customs Service, and the National Centre for Information Technology (NCIT).

It remains unclear whether the committee had conducted a due diligence assessment of Webb Fontaine prior to awarding the project.

The committee had contracted Webb Fontaine based on their documents -- documents which were found to be submitted on suspicious grounds facilitating corruption.

The due diligence undertaken by ADB following the media reports by Mihaaru and The Edition, found deception involved in Webb Fontaine's submission of documents, which was also acknowledged by the finance ministry.

Overview of corruption in the National Single Window project

In addition to Webb Fontaine's submission of its project proposal and documents under Webb Fontaine Asia Inc's name in order to falsely win the project for their UAE headquarters, the case at the ACC also accused the main Webb Fontaine office of having carried out various projects in other countries through underhanded means as well.

Meanwhile, the Webb Fontaine Asia Inc in the Philippines had not conducted any single window projects prior to its contract with Maldives, and thus did not meet experience requirements. The finance ministry’s initial tender stipulated that the contractor’s portfolio must include a minimum of two similar projects, each valued at no less than USD 4 million. Whereas Webb Fontaine Asia Inc did not have that experience, the Webb Fontaine Group had submitted details of projects carried out by its UAE main office, to win the bid.

The case at the ACC further highlighted that several companies, including international firms, with more experience and qualifications had lobbied for the project at much lower prices. It stated that the government had let the matter lie for five months after opening the tender process, before abruptly “disqualifying” the more capable and suited bidders in favour of an ineligible "paper company", at a high cost to the state.

The matter was first filed by the private entity at the ACC on December 5, 2019, prior to the contract signing between Webb Fontaine Asia Inc and the Maldivian government. The initial case requested ACC to halt the project awarding. However, after ACC failed to act, a second case was lodged on December 11, 2019.

Although ACC informed the complainant that the case has been reviewed and accepted for investigation in February 2020, the graft watchdog has still not informed them of their progress or decision.

The economic ministry's National Single Window is intended to provide an integrated platform for trade operations, facilitating hassle-free services for Small and Medium Enterprises (SMEs) and Import-Export businesses. This includes the establishment of an online portal for easy submission and transaction of trade-related documents by connecting relevant bodies together.

The government declared in February 2020 that the portal will be operational to provide import-export permits online within the next year.

The project is funded by ADB, which has been financing major development projects in Maldives over the past 40 years. The bank has approved over MVR 1 billion to fund various projects in the island nation across 2019 and 2020.

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