SNC-Lavalin settles with World Bank over Bangladesh bridge

Canada’s largest engineering and construction company has been suspended from bidding on international development projects funded by the World Bank. The Montreal-based company and the World Bank both published press releases about their settlement agreement on April 17.

The negotiated agreement came about following the World Bank’s investigations into corruption on the $50-million planned Padma bridge project in Bangladesh and another project in Cambodia. The Padma Multipurpose Bridge was planned to connect southwest Bangladesh with the capital Dhaka. The project is now on hold.

A second project which the World Bank says also involved misconduct by SNC-Lavalin is an electrical transmission project in rural Cambodia.

The suspension on SNC-Lavalin companies bidding will be imposed not only by the World Bank, but also other international development lending institutions that have an agreement with the World Bank. It affects 100 subsidiaries of the Montreal company although affiliates of the company will be allowed to continue to compete on World Bank funded projects as long as they don’t evade the sanctions imposed on the company.

The suspension was imposed for 10 years, although the period could be shortened to eight years if the company meets all the terms and conditions. There was no financial penalty.

SNC-Lavalin says revenues from international development projects have historically constituted 1% of its annual revenues.

The company has recently revamped its management and board and has hired a “world-renowned leader in corporate governance as a chief compliance officer. Its press release also notes that “an enhanced, robust and effective compliance program continues.”

The World Bank Integrity Vice President, Leonard McCarthy, said of the negotiated settlement with SNC-Lavalin: “This case is testimony to collective action against global corruption.” The 10 year bidding suspension is the longest ever imposed by the organization.

In other announcements this month, SNC-Lavalin said its jointly-owned Saudi registered engineering company, SNC-Lavalin Fayez Engineering, has been awarded a two-year contract by Yanbu Aramco Sinopec Refinery to carry out a range of engineering services for a new refining and petrochemical facility in Yanbu, Saudi Arabia.

Also, SNC-Lavalin announced it has officially signed a contract with Shriners Hospitals for Children for the construction of a new Montreal hospital. The contract includes the procurement, installation and commissioning of medical equipment.

To read the SNC-Lavalin press release about the World Bank settlement, click here.

To read the World Bank press release, click here.