Siemens loses right to bid on World Bank project

The company's alleged corruption involving bribes to African officials leads to the loss of bidding rights for two years

Siemens has lost the right to bid for the World Bank-funded communication project for two years following corruption allegations surrounding the company in the acquisition of supply contracts.

The German telecom equipment company is alleged to have paid more than US$100 million in bribes to officials in Nigeria, Libya and other countries in order to win favors for supply contracts. Two years ago, the Nigerian government canceled a supply contract with Siemens and suspended dealing with the company pending investigations into allegations that it gave more than $14 million in bribes to Nigerian government officials in order to be offered a supply contract.

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The company also allegedly paid bribes to government officials in Cameroon and Egypt among other African countries.

The World Bank is the largest funder of information and communication technology (ICT) projects in Africa and recently announced that it was focusing its attention on funding ICT projects in West Africa, including Nigeria.

The east African community including Kenya and Rwanda have already benefited from the World Bank's $424 million for the improvement of dilapidated ICT infrastructure.

George Tampfumanei, communications officer for the African Agency for ICT development, said the communication sector in Africa was failing to develop at a faster rate because of shortcuts used in acquiring contracts.

Siemens has since committed to paying $100 million to support global efforts over the next 15 years to fight corruption.

"One of the reasons why the telecom industry in Africa is failing to develop quickly is because supply contracts are not given on merit to international companies as government officials are easily bribed and accept anything," Tampfumanei said.

Siemens has also agreed to provide information on any additional cases of wrong doing to the World Bank's integrity vice presidency, which investigates fraud and corruption. Additionally, Siemens has agreed to change industry practices, clean up industry procurement practices and engage in collective action with the bank to fight corruption and fraud in the telecom industry.

The company was indicted by a court in Germany in 2007 for paying more than €9 million ($12.7 million) to three former communication ministers in Nigeria. The Nigerian officials who were alleged to have received the bribes were among many other recipients in many other African countries totaling more than €12 million.

Siemens accepted responsibility for misconduct and provided names of bribe recipients.