Africa Energy Intelligence (N° 330)
September 25, 2002

The Canadian firm Acres was found guilty of bribery last week and another eight firms could also be sentenced for corruption and be deprived of World Bank contracts. Millions of dollars are at stake.

A high court judge in Lesotho last week found the Canadian engineering firm Acres International guilty of paying a $260,000 bribe in the early 1990’s to Masupha Sole, the then head of the Lesotho Highland Water Project (LHWP), a dam costing nearly $8 million.

However, Acres, which has said it will appeal against the ruling, was just one of nine companies accused of corruption in the case. Indeed, the Lesotho judicial authorities have accused Italy’s Impregilo of paying $1.1 million to a South African go-between, Jacobus Michiel du Plooy, who funnelled $370,000 into Sole’s account at the UBS. Impregilo allegedly made the bribe in the early 1990’s through the HWV consortium.

A French consortium made up of Sogreah, Coyne and Cegelec is suspected of using a Panamanian company to pay GBP 20,900 into Sole’s same Swiss account. Also allegedly paying graft were Spie Batignoles, which made two payments of $5,617 and GBP 3,020, and Dumez, now part of Vinci. The Nigerian affiliate of the French group is accused of transferring FFR509,000 to Sole’s accounts via Afribank and the former Banque Internationale pour l’Afrique Occidentale.

Elsewhere, the Swiss-Swedish firm ABB and Germany’s Lahmeyer allegedly paid out $91,000 and $85,000 respectively, with Lahmeyer adding FFR 108,500 and 50,000 rand. Britain’s Alexander Gibb & Partners is accused of paying GBP 20,000. In all, Sole’s palm is said to have been greased by a total of 6 million rand over a six year period.

All of the companies will stand trial in coming months. The World Bank partly financed the dam project in Lesotho so any company found guilty of corruption will be barred from bidding for contracts in projects put out to tender in future by the institution. This means most will be deprived of major contracts if convicted. To get an idea of what that could mean in financial terms for the companies one must merely look at what World Bank projects they are involved in at present.

Spie Batignoles has nearly $37 million worth of contracts on the Chad-Cameroon pipeline, Lahmeyer is working for the Bank in Burkina Faso, Sierra Leone, Mali, Malawi, Mozambique and Uganda (totalling $6.7 million).

The World Bank has given a $4 million contract to Alexander Gibb & Partners to manage the bidding round for the Owen Falls dam in Uganda and Sogreah has $1 million worth of contracts from the Bank in Burundi, Senegal and Madagascar.

The next company to stand trial after Acres is Lahmeyer. The verdict is espected at the end of this month. Acres’ appeal will be examined in October.