Last week, the Maldives government awarded a Chinese company the contract to re-develop the Kadhdhoo airport to international standards and establish an integrated maritime hub in the protected area of Gaadhoo to develop Laamu atoll.
Not much detail has been provided about the two projects, similar to how other major projects are being launched by President Dr. Mohamed Muizzu's government. An official from Maldives Ports Limited (MPL) gave a video presentation about the maritime hub but ended the presentation without showing a plan for the airport.
The government awarded both projects to China CAMC Engineering Company Limited (CAMCE).
Although details about the company were not disclosed at the signing ceremony, MPL CEO Mohamed Wajeeh Ibrahim said the company is capable, wide-reaching and experienced.
“It is a company listed on the Chinese exchange and is widely involved in business dealings,” he said, referring to CAMCE.
However, since major questions have been raised about some of the companies awarded projects by this government, Adhadhu dug deeper to learn more about CAMCE.
The company is not only listed on China's exchanges list. The company is also on the blacklist of major international banks due to corruption. In Asia and South America, the company has made headlines in international newspapers due to major red flags.
Blacklisted by the World Bank and other international banks
China's CAMCE is on the World Bank's Listing of Ineligible Firms and Individuals. The company was banned from dealing with the World Bank on March 9, 2022.
The move is in line with a decision by the Asian Development Bank (ADB). This is the practice of international banks. If one bank takes action against a company in a major case, other banks would follow and take similar action.
CAMCE is also on the ADB's anti-corruption, debarment list. ADB has decided not to deal with the Chinese company from October 26, 2021, until October 26, 2026. This is because CAMCE violated the bank's Integrity Principles and Guidelines.
CAMCE on a debarment list.
The provision referred to by ADB deals with acts of fraud against the contractor or financier. ADB has taken action against CAMCE for fraud. It is not known exactly which project this measure is related to.
In addition to the World Bank and ADB, CAMCE is also on the blacklist of the Asian Infrastructure Investment Bank (AIIB) and the Inter-American Development Bank (IDB).
With the company's name on the lists, further investigation revealed several cases of bribery and fraud allegedly committed by the company in different countries. There are reports of how millions of dollars in projects were unfairly acquired. Some of the details are shared below.
Nepal Pokhara Airport
In 2011, CAMCE proposed to build an international airport in Pokhara, Nepal. China’s Exim Bank agreed to issue a loan for the project a year later. Under the agreement, only Chinese companies could submit proposals for the Pokhara airport.
CAMCE initially offered a price tag of USD 305 million for the project. However, it was twice Nepal's estimate and the price was lowered to USD 216 million due to pressure from the country's opposition politicians. The Pokhara airport opened on January 1, 2023, with the Chinese company completing the airport.
It is important to note that the financing partner for the Kadhdhoo airport project, which was signed last week in Maldives, has not yet been announced. The cost of the project and the duration is unknown.
The issues in the project in Nepal were exposed in a report published in the New York Times last October. The report, which includes interviews with six people involved in the project and Nepalese and Chinese agencies, contains information about the poor quality of the project.
The report revealed that the consultancy work was left unfinished before the start of the work and there was no evidence that the density of sand in the area where the runway was built was checked.
With the report, Nepal's Anti-Corruption Commission and Investigation of Abuse and Authority Commission launched an investigation into the Pokhara airport project. China's CAMCE declined to comment on the issues, the New York Times reported.
The investigations are still ongoing and according to Nepalese newspapers, the airport and the country's Civil Aviation Authority have obtained the necessary documents. Investigative teams have also been deployed to check the quality of the Pokhara airport.
Corruption is not the only problem facing Nepal because of the airport. Nepal does not have a way to repay the huge loan given by China to build the airport.
According to preliminary feasibility reports, Nepal will be able to repay the loan if at least 280,000 people annually visit Pokhara airport from next year. However, no international airlines have regular flights to the airport.
Lanka River Project
On October 31, 2009, Sri Lanka signed an MoU with China's CAMCE to divert the Gin Nilwala River. No major work has been done under the MoU, which was signed without any transparency.
The Sri Lankan cabinet approved to reach an agreement with the Chinese company for the project in September 2014. The agreement was signed on November 5 2014. The issues in the project emerged after the defeat of former President Mahinda Rajapaksa in the January 8, 2015, presidential election.
The newly formed government alleged that the former government had made an advance payment of USD 30 million to CAMCE in the run-up to the elections. A special audit report by the Sri Lankan Auditor General’s Office on the matter was published in 2022.
The report notes that the Sri Lankan government at the time paid USD 30 million in advance for the Gin Nilwala project a week before the elections. The case was investigated by the Sri Lankan authorities but later subsided.
When the project was awarded to the company, the company had not prepared an EIA for the project. The audit report said the EIA supposedly prepared at the time was non-existent. No practical work on the project has been started by CAMCE even after 10 years of signing the agreement.
According to the Sri Lankan Ministry of Irrigation, the feasibility study is still underway.
Accused of obtaining projects through influence in Bolivia
CAMCE has been associated with Bolivia since the administration of former President Evo Morales. Allegations that Morales' government had awarded several projects to a Chinese company came as the country's February 2016 elections approached. As a result, he lost the election and lost power.
The allegations relate to Morales' girlfriend from 2005 to 2007, Gabriela Zapata. Zapata was a senior official of the CAMCE company in Bolivia.
With the allegations, Zapata admitted to winning projects through bribes and that the company used government resources for various purposes.
Gabriela Zapata.
Zapata was sentenced to 10 years in prison by the courts after the investigation by the Bolivian parliament. She is still in jail. The Chinese company won projects worth USD 560 million under the corruption, according to international media reports in 2016.
However, the country's authorities have ruled that Morales is not to blame. No action was taken against him in the CAMCE case.
Venezuelan Rice Paddies Project
The company, which is to build a maritime hub in the protected Gaadhoo island under a project that will preserve 80 percent of the island, went to Venezuela 14 years ago in 2010.
Under the agreement with CAMCE by the Venezuelan government at the time, bridges, a food production laboratory and Latin America’s largest rice-processing paddy will be built in Delta Amacuro. Some 110,000 people in the farming area dreamt of jobs and business growth.
But ten years later, none of their dreams have come true. International media reported this, including a special report by Reuters.
Venezuelan residents told the report that no rice has been reaped under the project. Half of the work under the project has been completed. In 2019, the rice factory opened, but only imported rice is packed there.
However, the project has brought significant financial benefits to CAMCE. The country's government paid CAMCE more than USD 100 million to run the project.
This is only a fraction of the profits CAMCE received from Venezuela. The Chinese company's crimes in Venezuela were exposed in an investigation in Andorra, a European country. A private bank used by Venezuelan officials in Andorra was taken over for the investigation.
In the case, Andorra courts found that CAMCE had paid more than USD 100 million in bribes to senior Venezuelan government officials on various occasions.
In addition, the investigation revealed that Venezuela had awarded four projects worth a total of USD 3 billion to the Chinese company. The company has not completed any of these projects. However, USD 1.4 billion of the money has been taken by CAMCE.
The company paid bribes to 12 Venezuelans. They included a family member of Venezuela's former oil minister and the country's ambassador to China. In addition, 16 people from other countries were also bribed by the CAMCE.
