By Probe International

SNC-Lavalin official arraigned in ‘Lavalingate’ – Indian hydro dam scandal: Export Development Canada provided funding

Probe International

February 5, 2009

According to recent Indian press reports, the country’s Central Bureau of Investigation has arraigned Claus Triendl, a senior vice president with Canada’s SNC-Lavalin, for the engineering giant’s role in a contract to overhaul three hydro-electric dams in the southwestern state of Kerala. It is alleged that irregularities occurred in the awarding of the contract and that Lavalin benefited from undue favour.

Sources from CBI, India’s FBI equivalent, claim the investigation of the case dubbed ‘Lavalingate’ by the Indian press, and now eleven years old, is completed. A charge sheet is expected to be filed against 11 accused parties, including Mr. Triendl and prominent politicians from Kerala’s ruling Communist Party (Marxist), once sanction has been obtained from Kerala’s Governor and Chief Secretary.

India’s Comptroller and Auditor General, which conducted an earlier investigation, pointed out that the expenditure between 1997 and 2001 in its entirety had been “rendered wasteful,” and that various technical defects had been discovered in the renovated equipment.

India’s Economic Express reports that the CBI’s investigations revealed that the contract was awarded at an “exorbitant rate” and that it “caused a loss to the Kerala government with corresponding wrongful gain to Lavalin.” According to internal Canadian government documents released under the Access to Information Act, Canada’s export credit agency, Export Development Canada, provided capital funding for the project.

To make matters worse, as one Indian journalist [PDFver here] put it, after all the ‘work,’ not a single additional MW is being produced by the “modernized” hydroelectric dams. “What has the Indian taxpayer received in exchange for his Rs 374 crore?” he asks, adding, “the simple fact is that a lot of money was paid out with little or nothing to show for it.”

The dam scandal has become so notorious, it even has its own Wikipedia page.

For other news coverage, see:
India Economic Times [PDFver here]

Probe International coverage

Probe International’s Odious Debts page

Categories: By Probe International, EDC, Export Credit, News

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