The German company, Siemens, could be blacklisted for allegedly bungling World Bank funds earmarked to set up a major power plant in Pakistan, according to German weekly Der Spiegel.
Washington, Aug 2 : The German company, Siemens, could be blacklisted for allegedly bungling World Bank funds earmarked to set up a major power plant in Pakistan, according to German weekly Der Spiegel.
In June, World Bank investigators met with an unnamed former Siemens engineer at Madrid's Westin Palace Hotel. The project manager worked for a Siemens power plant project during the 1990s, the weekly reported.
According to him, Siemens is alleged to have artificially increased the costs for the construction of a power plant completed in the Punjab region of Pakistan during the late 1990s.
The World Bank refused to comment on the issue, and said, 'We comment on none of our investigations.'
Still the information the project manager provided at the secret meeting in Madrid has apparently electrified World Bank inspectors.
"The informant described in detail how he was hired to work for the project in 1996, via a middleman at a German engineering company operating under the name of Rousch Power Ltd."
"A wealthy Arab clan had got the 500 million dollars power-plant project off the ground. Siemens was to build it - a combined cycle gas turbine plant with a 412 MW capacity. In addition, the German industrial giant was to purchase shares of the operating company via its subsidiary project ventures," he said.
The Der Spiegel report said that the financing was split among the World Bank, a Pakistani bank group and an international bank group. Together, they provided 370 million dollars. The remaining 130 million dollars was to be provided by the companies involved in the construction of the plant.
The project manager doubted the accuracy of the internal accounts. About 370 million dollars - precisely the amount of credit approved - went to Siemens, despite the fact that, comparable plants had previously only cost around 220 million dollars, the weekly said.
The weekly said Siemens might have found a way to achieve partial ownership of a power plant without investing a single dollar of its own, and added that it is possible that overpayments were used to bribe local decision-makers.
The project manager shared his suspicions with his superiors at Siemens, but was thrown out.
"No indications" of possible abuses were found, according to Siemens.
The World Bank, claims the magazine, has long had its eye on Siemens on the lookout for possible corruption-related crimes.
The risks for Siemens are huge.
ANI