Snc-lavalin accused of misconduct in Cambodia
Faces 10-year ban on project bids
The World Bank has added Cambodia to the list of countries where SNC-Lavalin is alleged to have committed misconduct, as the Montrealbased company agreed to the longest bidding ban in the global agency’s history.
The bank didn’t provide details of the Cambodia project in question, but SNC-Lavalin was awarded a $5-million contract in 2009 to design and build an energy management system and control centre in Phnom Penh.
The project was part of a World Bank-financed project completed in 2011 that provided electricity to a large portion of Cambodia’s rural population.
The World Bank initially suspended SNC-Lavalin from bidding on projects it finances over allegations of bribery involving a bridge contract in Bangladesh.
The agency said that during its investigation, it learned of misconduct in Cambodia.
The World Bank said SNCLavalin’s misconduct was related to a conspiracy involving bribes and misrepresentations when bidding on bank-financed contracts.
As part of a deal involving the two countries, subsidiary SNC-Lavalin Inc. and more than 100 affiliates are barred from bidding on World Bank Group-financed projects for 10 years. However, the suspension could be lifted after eight years if the terms and conditions of the settlement agreement are complied with fully.
“This represents the longest debarment period that has ever been agreed to in a World Bank settlement,” the bank said in a statement Wednesday.
No financial penalty was imposed, and other SNCLavalin Group subsidiaries will be able to bid on such contracts if they meet the terms of the agreement, SNC said in a news release.
The World Bank said the barred SNC subsidiaries account for 60 per cent of the company’s overall annual revenues that reached $8.09 billion U.S. last year.
The company said revenues to the affected subsidiaries that are financed by the World Bank and other multilateral development banks have historically represented about one per cent of annual revenues.
Pierre Lacroix of Desjardins Capital Markets said the settlement puts this case to rest but doesn’t eliminate the risk that SNC-Lavalin could eventually be barred from bidding on contracts by other agencies or governments.
Quebec’s anti-corruption legislation calls on the province’s securities regulator, the AMF, to vet companies vying for any provincial and municipal contracts.
Lacroix said the settlement doesn’t handicap SNC because it represents a small part of its revenues. “It’s obviously not good news to be excluded from bidding for 10 years, but the good news there is that it didn’t cost anything,” he said in an interview.
The RCMP raided an SNCLavalin office in Oakville, Ont., in September 2011 at the request of the World Bank, which was investigating a bridge contract that was never awarded in the South Asian country.
The accusations of bribery prompted the World Bank to suspend a $1.2-billion loan and temporarily barred the SNC-Lavalin subsidiary from bidding on other contracts in the country.
A Bangladesh newspaper has reported that the country’s anti-corruption commission was investigating allegations that SNC-Lavalin Inc. offered “huge bribes” to at least six influential Bangladeshi officials, including two former government ministers, to obtain the lucrative bridge contract.
Allegations of impropriety have been levelled against the engineering giant’s role in projects in Algeria, Libya and Montreal.
The company didn’t return calls seeking comment.