ACGT Faces Legal Action for Alleged Overbilling in Chinese Contract in DRC

The Attorney General at the Kinshasa Gombe Court of Appeal, Robert Kumbu, has opened a judicial file against the Congolese Agency for Major Works (ACGT) and the Chinese Contract Coordination Office for alleged cases of overbilling of infrastructure of said contract.

This legal case opened against the two aforementioned structures follows the latest report published by the General Inspectorate of Finance (IGF) on the discrepancies that characterize this contract signed between the Congolese Government and a group of companies under Chinese law.

“The information in my possession mentions cases of over-invoicing of infrastructure works carried out under the collaboration agreement of April 22, 2008 known as the “Chinese contract” between the Democratic Republic of Congo and the Group of Chinese companies (GEC ), non-completion of works that were fully financed and non-execution of works already financed. 

The over-invoicing denounced comes from several artifices implemented during the conclusion of contracts for infrastructure works and their execution.

 These are in particular the exaggeration of unit costs and the rates of certain normal costs, the introduction into the cost of works of existing headings in contracts of the “sum to be worth” type. “, informs the indictment of the Attorney General near the Court of Appeal of Kinshasa Gombe.

For the latter, all these facts suggest a misappropriation of public funds because the investments of the said works are funds loaned to the Democratic Republic of Congo which reimburses them with interest, on its ores sold to the joint venture SICOMINES.

Thus the Attorney General instructs the following actions:

– Go down to the headquarters of SICOMINES, located in the Commune of Gombe to
obtain all the proof of payment for the work carried out with the approvals given by the Congolese Agency for Major Works (ACGT), and from the latter to obtain the contracts works, the final works accounts, the works acceptance reports and the control mission reports for each project;

– Going down to the field to carry out the counter-expertise of all the work
carried out;

– Establish and assess all cases of over-billing and the methods implemented for its accomplishment;

– Establish and determine individual responsibilities in the over-billing and
alleged embezzlement of public funds;

– Perform any other legal act likely to shed light on the religion of the investigators;

– Report;

In the audit of the General Inspectorate of Finance, the Congolese State only benefited from 800 million dollars out of revenues estimated at 10 billion dollars in the operation of SICOMINES.

This IGF report also reveals several irregularities in this Chinese contract, in particular what it describes as the arbitrary, discriminatory and illegal nature of the fixing as well as the distribution of the share capital undervalued at 100 million USD at the rate of 68% of the shares for the GEC and 32% for the Gécamines group while article 2 of law n°77/027 of 11/11/1977 specifies that foreign natural or legal persons cannot hold more than 60% of the share capital .