World Bank blacklists Canada's SNC-Lavalin

The World Bank banned Canadian engineering firm SNC-Lavalin from its projects Wednesday over corruption in a Bangladesh bridge project and another project.

SNC-Lavalin was debarred from working on bank projects for 10 years after former company officials were linked to alleged high-level bribery in the tainted project, which led to the World Bank canceling a $1.2 billion loan to Bangladesh for the Padma Bridge project last June.

The World Bank said the 10-year debarment was part of a negotiated settlement with SNC-Lavalin, and could be reduced to eight years for good behavior.

"The debarment is part of a Negotiated Resolution Agreement between the World Bank and SNC-Lavalin Group following a World Bank investigation into allegations of bribery schemes involving SNC-Lavalin Inc. and officials in Bangladesh," the Bank said in a statement.

It added that, while probing the Bangladesh case, Bank investigators also learned of "misconduct" by SNC-Lavalin in a rural electrification project in Cambodia.

"This case is testimony to collective action against global corruption," said Leonard McCarthy, World Bank integrity vice president.

A special World Bank unit alerted the Royal Canadian Mounted Police in 2011 to the possible wrongdoing at Montreal-based SNC-Lavalin during the bidding process for the Padma Bridge project.

Two of its former executives, Ramesh Shah, 61, and Mohammad Ismail, 48, are currently on trial in Canada for allegedly bribing foreign officials.

Construction of the 6.2-kilometre (3.8-mile) bridge in the southwest of the country was supposed to begin in the second half of 2010. Traffic currently crosses the Padma river -- the local name for the Ganges -- by slow ferries.

A World Bank study said the bridge could have a long-lasting impact on the impoverished southwest by improving transport links to the capital Dhaka.

In a statement, SNC-Lavalin said it had launched an internal investigation when the allegations were first brought to its attention and has cooperated with the World Bank investigation.

The company's decision to settle, said chief executive Robert Card, "signals our determination as we go forward to set standards for ethics in business conduct and for good governance that are beyond reproach.

"The company has already taken, and will continue to take, measures to ensure rigorous compliance and control procedures are in place."

In February, the Japan International Cooperation Agency, which helps countries with development projects, also withdrew its offer to lend Bangladesh $430 million to support the bridge.

JICA, and the World Bank before it, have pressed the Bangladesh government for a comprehensive investigation into the corruption.