June 6, 2004
Johannesburg: Impregilo, one of Italy’s biggest construction firms, will know within weeks if it is to face corruption and bribery charges arising from the Lesotho Highlands Water Project (LHWP).
In the meantime, the US senate foreign relations committee has started hearings into the three foreign companies that have already been convicted and fined in the mountain kingdom.
It is understood that the prosecutor in the corruption cases, Guido Penzhorn, and his deputy investigating officer will soon be flying to Brussels for talks with detectives from Olaf, the unit that probes white-collar crime within the institutions of the EU.
The project was funded by the EU and the World Bank, among others, and Olaf has in the past relayed information that helped to secure bribery convictions.
Penzhorn and his partner are then expected to head for Italy in the second week of July to seek information from the Italian authorities before deciding whether to prosecute Impregilo.
Last month the senate foreign relations committee, at the instigation of its chairman, Richard Lugar, began hearings into several bribery scandals on World Bank-funded projects involving multinational construction firms.
It is understood that committee staff have for some time been quietly conducting inquiries into the LHWP, the Yacyreta Dam on the Argentina-Paraguay border and projects in Cambodia.
In a letter to World Bank president James Wolfensohn, Lugar noted that three contractors on the LHWP had been found guilty of bribery, yet none of them had been blacklisted by the bank.
He asked Wolfensohn if the World Bank was investigating the contractors and if it planned to put them on its list of reprimanded firms or its list of firms disbarred from future contracts.
Lugar’s committee has oversight responsibility for international financial institutions that receive more than $1 billion (R6.5 billion) in US funding.
Lahmeyer International, the biggest engineering consulting group in Germany, was initially fined R10.5 million for violations related to the LHWP. On appeal, this was increased R12 million.
Acres International, a Canadian engineering and construction company, was fined R13 million.
Schneider Electric, a French electric company that merged with Spie Batignolles, pleaded guilty and was fined R10 million.