SNC-Lavalin says CIDA bidding ban will have little impact; hasn't bid in a while

MONTREAL – SNC-Lavalin says Ottawa’s decision to ban it from bidding on Canadian International Development Agency contracts will have little financial impact.

The engineering and construction firm says it only has two active projects in Indonesia and Vietnam with CIDA totalling nearly $35 million and it hasn’t bid on new work since 2011.

“Since they have changed their priorities, our services do not really correspond with the kind of projects they now support,” SNC-Lavalin spokeswoman Leslie Quinton said in an email Friday.

SNC-Lavalin (TSX:SNC) agreed last week to a 10-year ban on World Bank contracts for some of its subsidiaries over bribery allegations in Bangladesh and Cambodia.

It marked the longest such ban in the bank’s history.

CIDA said firms that have been sanctioned by a development organization for engaging in corrupt or fraudulent practices “will be ineligible” to bid on projects it funds.

Bidders are required to provide certification that they aren’t under sanction by a government or development organization providing development assistance, CIDA spokeswoman Amy Mills said.

“A proposal from any bidder, in Canada or abroad, unwilling or unable to provide such certification will be considered ineligible under the request for proposal process,” she wrote in an email.

Julian Fantino, the minister responsible for the aid agency, instructed CIDA staff to review SNC-Lavalin’s existing contracts to ensure they continue to comply with government ethics standards.

“Our government expects Canadian businesses to play by the rules,” he said in a statement.

Fantino said he directed CIDA officials to consult the World Bank to ensure it is aware of any implications for ongoing CIDA projects being implemented by SNC-Lavalin.

“This is specifically to ensure they continue to comply with the government of Canada’s standards on accountability, transparency and ethics.”

SNC-Lavalin said Friday it had not yet been contacted by the aid agency as part of a required consultation process before the existing projects are affected.

“Of course, we are willing to collaborate with them and provide any information that might help them make a decision, given all the measures we have in place and our significant progress in this regard,” Quinton added.

The World Bank suspension affecting subsidiary SNC-Lavalin Inc. and more than 100 affiliates could be lifted after eight years if the terms and conditions of the settlement agreement are complied with fully.

The RCMP raided an SNC-Lavalin office in Oakville, Ont., in September 2011 at the request of the World Bank, which was investigating a bridge contract that was never awarded in Bangladesh.

The accusations of bribery prompted the World Bank to suspend a US$1.2-billion loan and temporarily barred the SNC-Lavalin subsidiary from bidding on other contracts in the country.

Meanwhile another prominent Quebec engineering firm, Dessau Inc., was excluded Friday from bidding on work at the City of Montreal for at least five years.

Mayor Michael Applebaum said he was applying municipal rules following the admission by a company executive, while testifying recently at the Charbonneau inquiry, that he participated in collusion schemes.