Bloomberg News

Alstom Units Barred From World Bank Contracts on Misconduct

February 22, 2012

(Updates with improper payment in third paragraph.)

Feb. 22 (Bloomberg) -- Alstom SA, the third-largest maker of power equipment, won’t receive World Bank-funded contracts for two of its units for three years after acknowledging payment misconduct on a Zambian project, the lender said.

The restrictions for Alstom Hydro France and Alstom Network Schweiz AG are the result a “negotiated resolution agreement” that includes a restitution payment by the two companies totalling about $9.5 million, the Washington-based World Bank said today in a statement.

Alstom made an improper payment of 110,000 euros ($146,000) in 2002 to an entity controlled by a former senior government official for consulting on a World Bank-financed hydropower project in Zambia, the lender said. An Alstom spokeswoman couldn’t be reached for comment.

The settlement “is a wakeup call to global companies that are involved in development business that need to ensure their operations with the World Bank are clean,” Leonard McCarthy, the lender’s vice president for integrity, said in the statement.

The hydropower subsidiaries of the French engineering company also won’t be eligible for projects paid for by other lenders including the Asian Development Bank, the European Bank for Reconstruction and Development, and the Inter-American Development Bank.

The debarment can be reduced to 21 months if the companies comply with all conditions of the agreement, the World Bank said. The agreement doesn’t prevent Alstom and its other affiliates from winning contracts from the development banks.

--Editors: David Risser, Andrew Noel

To contact the reporter on this story: Francois De Beaupuy in Paris at fdebeaupuy@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net


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