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Australia arrests SMEC officials over bribery charges in Lanka; questions over Sirisena-era probe
View(s):A subsidiary of SMEC, a leading Australian project management firm, that is under investigation for bribing Sri Lankan officials to secure infrastructure contracts, was also debarred by the World Bank in 2017 in relation to its work in Sri Lanka. But no probe into SMEC’s activities made progress in Sri Lanka, officials said.
Two Australian men, aged 67 and 71, were this week charged after a decade-long investigation targeting SMEC International Pty Ltd, media reports said. The Australian Federal Police (AFP) said the suspects had arranged bribes of more than AUD 304,000 (RS 68mn at prevailing rates) to Government officials between 2009 and 2016 in pursuit of two Sri Lanka projects worth AUD 14mn (Rs 3.1bn). AFP has said more arrests and charges are possible.
SMEC International Pty Ltd and four of its controlled subsidiaries based in India, Bangladesh and Sri Lanka were debarred from six to 30 months for misconduct in South Asia. A 2017 World Bank media statement said an investigation had “revealed misrepresentations to meet bidding requirements under World Bank-financed projects in Sri Lanka and India”.
“The investigation also found evidence indicating inappropriate payments made in relation to World Bank-financed projects in Sri Lanka and Bangladesh,” it said.
SMEC has been embroiled in corruption controversies in several countries but allegations related to Sri Lanka have stood out starkly. In 2016, a Fairfax Media investigation claimed that Maithripala Sirisena–in his capacity as then Agriculture and Agrarian Service Minister–and his adviser had allegedly demanded a political “donation” from SMEC in relation to a World Bank-funded dam project.
The Australian media organisation said it had email evidence–it reproduced excerpts–which it said was the subject of a major AFP investigation.
In June 2009, Sri Lanka’s Cabinet approved a memorandum submitted by the then Agriculture Development and Agrarian Service Minister Maithripala Sirisena to award a consultancy contract for the Multi-Sector Water Resources Planning Project of the World Bank-funded Dam Safety and Water Resources Planning Project (DSWRPP) to SMEC International Pty Ltd, Australia, for Rs 365mn.
In a statement Mr Sirisena, who was the President by then hit back at the allegations, saying he had “no knowledge of the incident”. He also requested further details “to ascertain the involvement of any of his office staff” and said he would cooperate “in any investigation” in Australia and “will also instruct the relevant local authorities to investigate”. But there was no further information of a criminal probe in Sri Lanka.
SMEC is also remembered in Sri Lanka’s highways sector for “a billion rupee feasibility study” — granted by the Government via negotiation and not tender — for the Northern expressway up to Kurunegala with a link to Kandy (now called the Central Expressway).
The company eventually received more than Rs 1.4bn for the sub-par study. This was Rs 450mn over the original fee. SMEC then billed the Road Development Authority another Rs 113.4mn as a second “cost variation”. It is not immediately known whether the second installment was disbursed.
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