Banned firm won federal contracts

An Australian company banned by the World Bank for defrauding a fund to rebuild Indonesia after the 2004 tsunami and earthquake has contracts worth tens of millions of dollars with the federal government.

Engineering, architecture and environmental consultant GHD has been added to the World Bank's list of debarred and cross-debarred firms for a year, after the bank's sanctions board found "several distinct types of fraud, on different subject matters, extending over the course of two years" in Indonesia during a $US18 million ($20 million) contract.

Ian Shepherd, GHD's chief executive, said the decision "relates to an incident isolated to this project, over a limited time frame (2007-08) and does not impact on any other projects undertaken by the companies".

The ban means GHD cannot win any World Bank projects, cannot work for a firm awarded World Bank contracts and cannot receive any proceeds from the bank until June 9, next year.

The June 10 sanctions board report found, and GHD did not contest, that the company fraudulently failed to disclose its agreement to pay a $US34,000 "marketing fee" to a subconsultant.

The company also agreed with the report's finding that GHD submitted invoices for reimbursement of $US210,000 in housing costs not actually incurred. GHD agreed that it used false supporting documentation to request reimbursement of $US150,000 in vehicle and transport expenses.

GHD has withdrawn from Indonesia and is thought to derive the bulk of its revenue from Australia.

The federal government's tender website shows contracts with many government departments, such as AusAid and the Department of Foreign Affairs and Trade.

Defence contracts are common, including contracts worth $5.7 million and $3.5 million for building construction and support and maintenance and repair services.

GHD also has roles in Victoria's biggest infrastructure projects: it is the lead technical adviser for the east-west road link, and is working on the Regional Rail Link,the Port of Hastings development and the state's desalination plant.

GHD argued before the sanctions board that it should receive lesser sanctions than the manager and subconsultant, "who were responsible for the misconduct and received negotiated debarments of three years each". But the sanctions board found the company was "at least as responsible for the fraudulent practices as the other two respondents".