WB bans SNC-Lavalin

The World Bank has banned Canadian company SNC-Lavalin Inc for 10 years because of its “misconduct” in relation to the Padma bridge project of Banlgadesh.

Over a 100 affiliates of SNC-Lavalin have also been blacklisted in what was said to be the ‘longest debarment period’ ever agreed to in a World Bank settlement.

The decision was announced in a press release issued on Apr 17 from the bank’s headquarters in Washington.

This means the World Bank holds SNC Lavalin responsible for adopting unfair and illegal means to secure the consultancy of the $2.9 billion Padma bridge project.

SNC-Lavalin Inc is said to be a subsidiary of SNC-Lavalin Group representing more than 60 percent of its business.

The ban is being enforced under ‘Negotiated Resolution Agreement’ between the World Bank and SNC-Lavalin Group following investigations into allegations of bribery allegations involving SNC-Lavalin Inc and Bangladesh officials, the press release read.

During the investigation, SNC-Lavalin Inc was also blamed for another case of "misconduct" in a project in Cambodia, the press release read.

However, it said the ban could be reduced to eight years if the companies comply with all conditions of the agreement. The rest of the SNC-Lavalin Group also faces the ban for violation of the agreement.

“This case is testimony to collective action against global corruption,” World Bank Integrity Vice President Leornard McCarthy said. “Going forward, I hope that SNC-Lavalin’s commitment under this agreement represents meaningful action in deterring the risks of fraud and corruption to development projects.”

The ‘misconduct’ refers to a conspiracy to pay bribes and and then covering it up when bidding for World Bank-financed contracts in violation of the bank’s procurement guidelines.

Under the agreement, SNC-Lavalin Group and its affiliates pledge cooperation with World Bank’s Integrity Vice President and continue to improve their internal compliance.

The 6.15 kms rail-road bridge on the Padma river is Bangladesh's biggest ever infrastructure project.

The World Bank has agreed to provide $ 1.2 billion for it but that was suspended amidst allegations of corruption. Two officials of SNC-Lavalin Inc are facing trial in Canada over this allegation.

In January this year, after a long impasse, Bangladesh finally withdrew the funding request from the World Bank.

China and Malaysia came up with funding plans but Bangladesh has finally decided to go ahead with its own resources.

Finance Minister AMA Muhith has said TK 68.52 billion will be earmarked for the project in the 2013-14 national budget.