Impregilo fined for LHWP bribes

29 April 2008

The Lesotho High Court has fined Impregilo ZAR 15 million (US$ 2.04 million) after it pleaded guilty to charges of bribery and corruption on the US$ 8 billion Lesotho Highlands Water Project (see iC March 2003).

Impregilo is the fourth company to be prosecuted and found guilty of paying bribes to secure contracts on the Lesotho Highlands Water Project (LHWP). It was accused of paying ZAR 1 million (US$ 136000) to Masupha Sole, LHWP's chief executive, in an effort to win contracts on the project. Mr Sole was sentenced to 18 years' imprisonment in May 2002 for receiving ZAR 12 million (US$ 1.63 million) in bribes from a number of international companies.

In an earlier trial Canadian consultant/engineer Acres was also found guilty of paying bribes to Mr Sole. On appeal, its ZAR 22 million (US$ 2.98 million) fine was reduced to ZAR 15 million (US$ 2.04 million). Acres was banned from World Bank projects for three years following its conviction by the Lesotho High Court.

German engineering consultancy Lahmeyer International was also convicted of paying Mr Sole ZAR 2.5 million (US$ 339000) in bribes and was fined ZAR 10.5 million (US$ 1.42 million) in an earlier trial. It appealed but the Appeal Court not only confirmed the conviction, but raised the fine to ZAR 12 million (US$ 1.63 million).

French company Schneider Electric also earlier pleaded guilty to paying bribes to Mr Sole and was fined ZAR 10 million (US 1.36 million).

The Lesotho Highlands project is Africa's largest water transfer and hydropower project. It is being implemented by the governments of South Africa and Lesotho and is funded by the European Union and the World Bank.

It captures water from rainstorms in Lesotho's Orange/Senqu catchment area and transfers it to South Africa's Vaal River system. This in turn provides electricity and water for Johannesburg and the surrounding area.

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