World Bank bars company for improper payment

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WASHINGTON The World Bank on Wednesday blacklisted two subsidiaries of French engineering company Alstom for the next three years for improper payment in a Zambian hydropower project funded by the global development lender.

A settlement between the World Bank and Alstom, which the Bank said had acknowledged the misconduct, includes a restitution payment of about $9,5 million by Alstom Hydro France and Alstom Network Schweiz (Switzerland).

The World Bank spends billions of dollars annually on development projects in some of the worlds poorest countries to eradicate poverty. It has come under pressure from member countries to root out corrupt use of its funds and stepped up efforts to blacklist companies and individuals that abuse its funds.

The World Bank said Alstom made an improper payment of 110 000 in 2002 to a company controlled by a former senior Zambian government official related to the Zambia power project financed by the bank.

Alstoms settlement with the bank is a wake-up call to global companies that are involved in development business that (they) need to ensure their operations with the World Bank are clean, Leonard McCarthy, the World Banks anti-corruption chief said.

Alstom initially downplayed the action, but later distanced itself from the comment.

For us its an allegation which hasnt been proven on which weve agreed to a settlement with the World Bank and which relates to a deal which is old and limited in scope, the spokesman said.

Later, Alstoms general counsel Keith Carr said in a statement: Alstom aligns itself with the World Bank Press release. Any comments that were previously made by Alstom are not valid.

The World Bank said the debarment could be reduced to 21 months if the companies comply with all conditions of the agreement, which includes continuing to improve their internal compliance programmes. Reuters