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dam-l Financial Times on LHWP corruption/LS
WORLD NEWS: Western contractors face bribery charge over Lesotho dam
Financial Times; 19-Nov-1999
European, Canadian and South African contractors involved in a US$8bn
water project in southern Africa have been charged with paying
bribes, according to the World Bank, the South African government and
prosecutors in Lesotho.
In an unusual move, the World Bank, which has said it is stepping up its fight
against corruption, has pledged financial and other support for the
cash-starved Lesotho justice department in its pursuit of the case.
"We've had enough. We want to send a clear message," said Fayez Omar,
World Bank resident representative in South Africa.
The companies charged include ABB, the Swiss-Swedish group, Spie
Batignolles of France, Impregilo of Italy, Sir Alexander Gibb & Partners of the
UK, Acres International of Canada, and Concor of South Africa.
All have worked over the past decade on the Lesotho Highlands Water
Project, a system of dams and tunnels designed to alleviate water shortages
in central South Africa by carrying water down from the landlocked mountain
kingdom. About US$2bn has been spent so far.
Companies contacted yesterday either denied involvement in corruption or
declined to comment, but several confirmed that they had received
summonses to appear in court in the Lesotho capital of Maseru.
Prosecutors allege that contractors paid Dollars 2m of bribes, either directly
or through Panamanian and other intermediaries, to Masupha Sole, former chief
executive of the Lesotho Highlands Development Authority. Mr Sole has
already been ordered to repay more than Dollars 1m following a civil suit, and
a criminal case against him has begun.
The World Bank, which has supported the project with Dollars 150m of loans,
said it was conducting its own investigation and might ban from Bank-financed
projects any companies found guilty of paying bribes.
"The Bank has increasingly taken such action against firms that engaged in
corrupt or fraudulent practices," it said. "Since its procedures were revised
in January 1998, the Bank has debarred 12 firms and two individuals from further
contracts financed by the Bank."
In Zurich, ABB said it had not received documents relating to the case but
would co-operate with the authorities in the investigation. Peter Brettell,
managing director of Sir Alexander Gibb in the UK, said the company would
"vigorously defend" the case.
Concor, the South African construction company, denied it had paid bribes.
"Mr Sole has a fat bank account, there's no doubt," said Gavin Hardy, chief
executive. "But they shouldn't believe what he said."
Acres International confirmed that a Lesotho citizen named in the court
papers, who was alleged to have paid bribe money from a Swiss bank account
to Mr Sole, had been under contract as a representative for Acres. But Acres
denied any corruption on its own part and said it "did not authorise or have
any knowledge of those payments to Mr Sole".
Activists who are suspicious of World Bank-funded dams and oppose the
Lesotho project on environmental and social grounds yesterday expressed
delight at the news of the Bank's pursuit of the corruption case.
"I think this is very good news that the World Bank is taking this decisive
action, but hopefully it will also apply its own guidelines on procurement,"
said Korinna Horta, economist at the Environmental Defence Fund, a US pressure
group.
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Lori Pottinger, Director, Southern Africa Program,
and Editor, World Rivers Review
International Rivers Network
1847 Berkeley Way, Berkeley, California 94703, USA
Tel. (510) 848 1155 Fax (510) 848 1008
http://www.irn.org
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::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
Lori Pottinger, Director, Southern Africa Program,
and Editor, World Rivers Review
International Rivers Network
1847 Berkeley Way, Berkeley, California 94703, USA
Tel. (510) 848 1155 Fax (510) 848 1008
http://www.irn.org
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