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.
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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