The World Bank has temporarily suspended a subsidiary of Canadian engineering company SNC-Lavalin from bidding on new bank contracts — effective immediately.
The Royal Canadian Mounted Police raided several offices of SNC-Lavalin in September as part of the World Bank’s investigation on the company’s work on the Padma River bridge project in Bangladesh, The Wall Street Journal reports.
The bank agreed to provide a $1.2 billion loan for the $1.9 billion project in 2010. SNC-Lavin bid to act as the engineer for the Bangladeshi government and supervise the contractor responsible for the project. But in 2011, the bank put the funds on hold due to corruption and fraud issues.
The unit’s name was not disclosed, but the company said it “intends to provide a comprehensive response” to the allegations. SNC-Lavalin Interim CEO Ian Bourne said the company respects the bank’s decision and will continue to “cooperate fully” with the bank on the “matter.” All ongoing projects and new bids by the company’s other subsidiaries and divisions will “continue as usual.”
The World Bank has yet to comment on the issue.
Under the World Bank’s sanctions procedures, companies temporarily suspended are not allowed to receive World Bank-financed projects for a period of six months. This may be extended for an additional six months pending the completion of the World Bank Integrity Vice Presidency’s investigation.
This is not the first time SNC-Lavin has been marred by controversy. Last month, the company’s chief executive stepped down after an internal investigation indicated he breached company policies by authorizing the payment of 56 million Canadian dollars ($56.3 million) to unidentified agents, according to The New York Times.
Read more:
Read more development aid news online, and subscribe to The Development Newswire to receive top international development headlines from the world’s leading donors, news sources and opinion leaders — emailed to you FREE every business day.
