The World Bank has temporarily suspended a unit of the Canadian company SNC-Lavalin from participating in tenders ofWB-funded projects. The suspension follows the findings that have come out so far from an ongoing probe into allegations of bidding anomalies in the Padma bridge project.
SNC-Lavalin, the lowest bidder in the project’s construction supervisory consultancyinvolving $50 million, confirmed
it on Monday without mentioning the name of the unit.
However, a Canadian newspaper, "Canadian Business”, identified the unit as the engineering firm's Bangladesh subsidiary.
According to the WB website, the temporary suspension on a bidder is imposed before the completion of an investigation by the World Bank Integrity Vice Presidency (INT) if there is already sufficient evidence of malpractices that demands a sanction of minimum debarment of at least two years. A temporary suspension prevents a company from being awarded new WB-financed contracts for an initial period of six months, subject to possible extension for an additional six months, pending the completion of the INT investigation and the commencement of sanctions proceedings. As the sanctions process is confidential, the status of any particular case cannot be disclosed.
The WB website says nothing about this particular investigation, while the bank's officials in Bangladesh declined to comment on the matter.
In recent times, WB Country Director Ellen Goldstein repeatedly told the media that the snags over Padma bridge funding would be over once the probes into corruption allegations involving the project were completed.
“We are waiting for the preliminary outcome of some ongoing investigations,” she told reporters on March 28.
The WB suspended its $1.2 billion funding of the $2.9 billion project in September last year over allegations that former communications minister Syed Abul Hossain and his family-owned company Sahco sought to coerce multiple companies into using Sahco as a paid "silent agent" in order to get permission to bid for the contract of the main bridge. It also alleged that some SNC-Lavalin officials had tried to manipulate the bid results.
In his reaction to the latest development, Communications Minister Obaidul Quader yesterday said the bridge's funding and the investigation into SNC-Lavalin's activities were two different things.
He said SNC-Lavalin was one among many bidders and its temporary suspension by the WB would not affect the selection of other companies in the Padma bridge project
“You will get good news very shortly," said the communications minister.
He hoped the stalemate with the WB would be resolved soon and the bridge's construction would begin within the present government's tenure.
Quader also said the government had other alternatives. “A number of countries have already shown interest in funding the Padma bridge project,” he told reporters at the Secretariat in the capital.
Obaidul Quader replaced
Abul Hossain as communications minister after the WB raised the allegations.
An international consortium led by the World Bank last year agreed to finance the 6-kilometre rail-road bridge over the Padma river. No contract for constructing the bridge has been awardedyet.
The government has already spent Tk 1,050 crore for land acquisition, compensation, resettlement and rehabilitation of the affected people.
In September last year, Royal Canadian Mounted Police raided several locations of SNC-Lavalin following a WB referral.
SNC-Lavalin in a press release on Monday said, "The allegations in the confidential report relate to the Padma Bridge project in Bangladesh, for which the Company's subsidiary had bid.”
“The temporary suspension, which is effective immediately, is not a final decision but is an action taken by the World Bank to control interactions with the subsidiary concerned" with the probe and final decision pending, said SNC-Lavalin.
According to WB regulations, the subsidiary named has the right to respond to the allegations outlined in the WB report before a final decision is made, said the company.
SNC-Lavalin said it intended to provide a comprehensive response to the allegations.
“We respect the World Bank's decision to declare a temporary suspension on the subsidiary affected until this matter is concluded,” said the company's interim CEO, Ian Bourne.
All ongoing projects and new bids by other subsidiaries and divisions will continue as usual, he added.
The Canadian company said it had launched its own internal investigation when the matter was first brought to its attention. “We will continue to cooperate fully with the World Bank on this matter.”
The engineering firm operating in about a hundred countries has offices across Canada and in over 40 other countries.
The WB's decision came as a fresh blow to the Canadian company whose chief executive quit last week after an internal probe found that he had authorised $56 million in payments for projects that did not exist. Canadian police are now investigating the payments.