World Bank debars Colas subsidiary for collusion, fraud in Madagascar airports scheme

The sanctionable practices occurred during the tender for the 28-year concession to run Ivato International Airport, above, and Fascene Airport (Z thomas/CC BY-SA 4.0)
The World Bank yesterday announced the two-year debarment of Madagascar-based Colas Madagascar S.A., a subsidiary of France’s Colas S.A., in connection with collusive and fraudulent practices relating to a €220m expansion of airports in Madagascar.

The World Bank provided partial financing for the design and development of the expansion of Madagascar’s two main airports: the Ivato International Airport and the Fascene Airport.

According to the bank, Colas Madagascar S.A. engaged in collusive practices by arranging for improper meetings with government officials between February 4, 2015 and May 4, 2015, during the tender for the 28-year concession to run the airports. Colas Madagascar S.A. also committed a fraudulent practice by failing to disclose such meetings to the International Finance Corporation.

The sanction stems from an investigation conducted by the World Bank Group’s Integrity Vice Presidency. The matter was resolved through settlement agreements negotiated with the multiple companies involved.

The debarment makes Colas Madagascar S.A. and its subsidiary, CMBI SNC, ineligible to participate in projects financed by institutions of the World Bank Group. It is part of a settlement agreement under which the company acknowledges responsibility for the underlying sanctionable practices and agrees to compliance conditions.

The settlement agreement provides for a reduced period of debarment in light of the company’s cooperation and voluntary remedial actions.

As a condition for release from sanction under the terms of the settlement agreement, the company’s non-sanctioned parent, Colas S.A., has committed to adapt its group-wide corporate integrity compliance programme.

The debarment of Colas Madagascar S.A. qualifies for cross-debarment by other multilateral development banks.

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