Wednesday, September 23, 2015

European Money Funds Freight and Passenger Infrastructure Despite Corrupt History

In a Country Where Horse Drawn Carts Still Haul Cargo Work is Desperately Needed
Shipping News Feature

GUINEA – The task of providing technical assistance in the improvement of the country’s road management capacity and public transportation infrastructure has been awarded to a joint venture between New Jersey headquartered Louis Berger and French based engineering outfit Egis International with the project funded to the tune of €4.4 million by the European Development Fund. Transport infrastructure is in a parlous state in the country with horse and donkey drawn carts often hauling freight and building essentials. The rail system is in disrepair with some services abandoned and the capital Conakry, which holds roughly a quarter of the population, is the main source of supply via its port.

This latest technical assistance project is intended to contribute to sustainable improvements in the country’s road network. The contract’s overall objective is to support efforts to reform the regulation and organization of Guinea’s road transportation sector. Those efforts are expected to lower mobility costs at a constant level of service and reduce consumer prices, which should benefit the country’s poorest communities. The contract also seeks to integrate national and urban planning best practices into urban mobility-focused transportation policies.

This project is part of the European Union’s €83 million ($91 million) Support Project for the Transport Sector (PAST) initiative fund, and one of five European Union development projects, financed to the tune €140 million, supporting the Guinean government's efforts to promote good governance, protect human rights and improve mobility and road infrastructure. Pascal Houdeau, Louis Berger deputy general manager for Western and Eastern Africa commented:

“Poor transportation infrastructure negatively impacts development by slowing mobility and boosting the cost of goods and services. Lowering transportation costs through infrastructure improvements can have outsized benefits in emerging markets like Guinea, especially in the country’s poorest communities which are penalized the most by inadequate infrastructure.”

Louis Berger has been working on projects in Guinea for more than 25 years but the company has been scalded by various corruption scandals stretching back a decade or more. The Afghanistan situation saw the company appointed as agents for the US Agency for International Development (USAID) in 2001 which subsequently led to a $69 million settlement for alleged corruption and the house detention of the CEO for a year together with a $4.5 million personal fine for conspiracy to defraud on Iraq and Afghan USAID Contracts.

The Department of Justice also settled matters over several violations of the Corrupt Practices Act when the company was found to have paid bribes to win business in several countries including India, Indonesia, Vietnam and Kuwait and the World Bank debarred the company this year when bribes paid to corrupt officials were discovered to have been paid in two of the Bank’s contracts.