(Trinidad Guardian) The Government has decided to pull out of its planned arrangement with the Canadian Commercial Corporation (CCC) to have the corruption-tainted Canadian conglomerate SNC-Lavalin build the $1 billion Penal Hospital and Rehabilitation Centre. This follows a meeting with chairman of the Urban Development Corporation (Udecott) Jearlean John, Canadian High Commissioner Gérard Latulippe and a delegation from the CCC, a crown corporation of the government of Canada, which supports Canadian trade by helping Canadian companies maximise export opportunities, particularly with government markets. The delegation included the CCC’s vice president of strategy and organisational development Mariette Fyfe-Fortin and regional director Luc Allary, who flew in for the meeting on Sunday night.
During the meeting, officials from the Canadian delegation presented the CCC’s recommendations from a due diligence report, which was completed early this month and forwarded to Udecott last week. The meeting lasted for almost two hours and took place at John’s office, South Quay, Port-of-Spain. In an interview afterwards, John said the delegation sought to prove that SNC-Lavalin had put in place a new structure of governance to mitigate against corruption. “They told us that they had developed enhanced management standards, ethics in governance as well as improved compliance, governance, quality, health and safety standards,” John added. She said the CCC had encouraged the Government to enter into a contract with SNC-Lavalin to build the hospital on the basis of its improved managerial standards.
However, John said, a decision was taken not to enter into another contract with SNC-Lavalin and for the CCC to nominate another contractor. Housing Minister Dr Roodal Moonilal, who was also part of the meeting, said signing a contract with SNC-Lavalin could harm T&T’s international reputation. “Since the story broke we have been asking for a due diligence report, which was late in coming. This matter was widely discussed and in light of the latest international reports of corruption, bid-rigging and poor ethical conduct, we requested due diligence,” Moonilal said.
He added: “We received a delegation from the High Commissioner’s office in Port-of-Spain and the CCC today and they presented some conclusions from a due diligence report. After a discussion, we invited the CCC to nominate another contractor.”
He added that Udecott would follow up with a letter today and would await an official response. Moonilal is expected to brief Cabinet on the issue on Thursday. Asked whether there will be any legal ramifications from the decision not to use SNC-Lavalin on the project, Moonilal said no. He said: “There is a reputational risk involved in SNC-Lavalin and strong public-interest sentiments about conducting business with companies that have difficulty in passing the test of confidence. “We must also respect the importance of integrity and confidence, not only of government institutions, but also that of the public. “I feel that there is public concern and lack of confidence in the contractor and the position of T&T’s reputation. All projects, especially government-to-government arrangements, must bring confidence in public interest.”
He said the first phase of the contract was the design and $2.2 million had been spent on it so far. “We don’t think there will be any significant cost to the State if we do not proceed because we do not have a contract with SNC-Lavalin for the construction phase,” Moonilal added. He said he decision to pull out of the arrangement would not strain T&T’s relationship with Canada. On May 1, 2012, Udecott signed a framework agreement with the Canadian Government to design the hospital at Clarke Road, Penal. The T&T Guardian has been reporting on the shady background of SNC-Lavalin since June.
PNM responds: The Government’s decision took too long, Diego Martin North-East MP Colm Imbert said yesterday. He said: “It was obvious months ago that it was a very unsuitable contractor. What is particularly bad is, this contractor is accused of bribing politicians and public officials in developing countries. “It would have been a terrible thing for T&T if we were exposed to this kind of behaviour. “I don’t understand what is meant by asking the CCC to nominate another contractor. Is it that we have no say at all in the selection process? Do we not have a say in the procurement process?” Imbert said he intended to deal with the issue when his motion on SNC-Lavalin was brought to Parliament. Both Imbert and Opposition Leader Dr Keith Rowley have called on the Government to explain how SNC-Lavalin was chosen. Imbert also questioned the relationship between SNC-Lavalin and T&T’s High Commissioner to Canada Philip Buxo, who was an executive director of the company before his diplomatic appointment. However, Buxo has denied any involvement in the arrangement.
SNC’s troubled record
In April this year, the World Bank slapped a ten-year ban on SNC-Lavalin Inc, a subsidiary of SNC-Lavalin and its affiliates, from bidding on projects funded by the bank because of a scandal over bribes. A joint investigation by CBC News and Toronto’s Globe and Mail found a division of SNC-Lavalin had been using a secret internal accounting code for bribes on projects across Africa and Asia for years, according to former employees. The Canadian Broadcasting Corporation reported last week that the Royal Canadian Mounted Police (RCMP) had charged Kevin Wallace, a former senior vice-president. Wallace is accused of being part of a bribery scheme related to a $2.9 billion development project in Bangladesh.
The RCMP is now examining SNC’s Lavalin’s involvement with other foreign nationals. Last year, police charged two lower-level SNC-Lavalin employees—Mohammad Ismail and Ramesh Shah—with conspiring to pay bribes to help SNC-Lavalin win a supervising contract worth Can$50 million for the Padma bridge mega-project. Both are already awaiting trial in Toronto. The latest round of corruption allegations has tarnished Canada’s international reputation, as it is now ranked top on the World Bank’s corruption list. In a report, the World Bank said out of the more than 250 companies blacklisted from bidding on its global projects under its fraud and corruption policy, 117 are from Canada. SNC-Lavalin and its affiliates represent 115 of those entries.