World Bank debars Alstom units for 3 years

Alstom is an energy solutions and transport company. The World Bank debarred two subsidiaries of Alstom SA due to payment misconduct. Photo by: Italo Treno / CC BY

The World Bank on Wednesday (Feb. 22) debarred two subsidiaries of Alstom SA due to payment misconduct on a hydropower project in Zambia.

The case dates back to 2002, when Alstom made an “improper payment” of €110,000 ($146,000) to a company controlled by a former senior government official for consultancy on the Zambia Power Rehabilitation Project. The project was financed by the bank.

The World Bank said the announcement was made following Alstom’s “acknowledgment” of the misconduct. But an Alstom spokesman told Reuters the case is an “allegation which hasn’t been proven.”

Despite this, Alstom agreed to a settlement with the World Bank. Alstom Hydro France and Alstom Network Schweiz AG, under the Negotiated Resolution Agreement, will have to pay a restitution fee totaling $9.5 million. They will not be eligible to receive any World Bank-funded contracts for a period of three years. The case, however, can be reduced to 21 months if the companies comply with all the conditions included in the agreement.

In addition, both subsidiaries of the French engineering company are debarred from working on projects financed by the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, and the Inter-American Development Bank. These multilateral development banks signed on a cross-debarment agreement with the World Bank in 2010. Alstom SA and its other affiliates, meanwhile, are “conditionally non-debarred.”

The move reinforces the bank’s commitment to anti-corruption practices. World Bank Integrity Vice President Leonard McCarthy said the settlement is a “wake-up call” to companies involved in development business to ensure their operations with the bank are clean.

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About the author

  • Jenny Lei Ravelo

    Jenny Lei Ravelo is a Devex Senior Reporter based in Manila. She covers global health, with a particular focus on the World Health Organization, and other development and humanitarian aid trends in Asia Pacific. Prior to Devex, she wrote for ABS-CBN, one of the largest broadcasting networks in the Philippines, and was a copy editor for various international scientific journals. She received her journalism degree from the University of Santo Tomas.