TIZ urges probe on blacklisted company's Itezhi-tezhi contract

TIZ urges probe on blacklisted company's Itezhi-tezhi contract
By Kabanda Chulu and Bright Mukwasa
Tue 20 Mar. 2012, 11:59 CAT

TIZ has challenged the government to establish how a French company blacklisted by the World Bank for corruption got a contract to supply equipment worth K135 billion for the Itezhi-tezhi power project.

The World Bank has blacklisted and fined two subsidiaries of Alstom SA, a French engineering company, after the companies allegedly offered a K781 million bribe to an entity controlled by a former senior government official (not named) for consultancy services for a World Bank-financed power-rehabilitation project in Zambia in 2002.

The Alstom subsidiaries, Alstom Hydro France and Alstom Network Schweiz AG in Switzerland, will pay K50.1 billion in restitution and be blocked from bidding on World Bank contracts for up to three years.

Commenting on the matter yesterday, Transparency International Zambia (TIZ) president Reuben Lifuka said it was shocking that in 2011, the MMD government went ahead and awarded Alstom a contract to provide turbines and generators worth K135 billion for the 120-megawatt Itezhi-tezhi hydroelectric project.

"We wonder what sort of due diligence was done given the many investigations that this company and its subsidiaries are facing in a number of jurisdictions. It is absolutely necessary that a procurement audit of this particularly contract is conducted by government, with the involvement of all necessary law enforcement agencies, especially the Anti Corruption Commission. It is our expectation that the Zambian government, through the Zambia Public Procurement Authority, will equally blacklist this company from participating in any future contracts," Lifuka said.

"We further demand that the Zambian government through the Anti Corruption Commission should immediately commence investigation against the former senior government official who received the bribe that has landed Alstom in this situation of debarment. Clearly, the action of the World Bank is a good beginning but the Zambian authorities should play their role and bring this official to book."

He advised government to seize all proceeds of crime from the official in question in order as a deterrent to all public officers engaged in public procurements.

"It is time that as a country we do everything possible to bring to an end these criminal acts of corruption. The PF government should pursue all those that were involved in this case and bring them to book, regardless of their standing in society," Lifuka said.

"We also demand that the World Bank clearly stipulates how the K50.1 billion restitution fee will be administered specifically for the Zambian situation. It is our considered opinion that these funds should go towards compensating Zambia for the damage caused by this act of corruption by the two Alstom subsidiaries. It is evident that the bribery paid out is a cost that the Zambian government has had to pay in terms of the loans obtained for the Zambia Power Rehabilitation Project."

He further challenged the European Investment Bank (EIB) and the African Development Bank to equally apply the debarment measures against Alstom.

"We are aware that under the Zambia Power Rehabilitation Project, Alstom subsidiaries were involved in different aspects of the rehabilitation contracts for Victoria Falls Power Station, Kariba North Bank Power Station and Kafue Gorge Hydro Power Station and government obtained credit for this project from various funding entities, including the World Bank,EIB, AfDB and Development Bank of Southern Africa. So it makes sense that all these entities effect the blacklisting of the two Alstom subsidiaries for the same misconduct," said Lifuka.