Metro authorities under fire for joint contract with company implicated in bribery scandals

Cairo’s Metro Company is coming under heavy criticism for continuing to do business with the French company Alstom despite its involvement in two bribery scandals involving Egyptian state officials.

According to the privately owned Al-Shorouk newspaper, the company was implicated in a bribery case involving a leading official from the Metro Company in April of this year. In 2014, the French power and rail transport company also pleaded guilty to bribery charges after it was implicated in a kickback scheme involving officials from the Egyptian Electricity Holding Company.

Al-Shorouk and other privately owned local media outlets report that Alstom has been awarded a joint contract, along with other French and Egyptian companies, to undertake electric, signaling, and mechanical works for the fourth phase of Cairo metro’s third line. According to the Egyptian Metro Company, the latest phase will encompass eight metro stations, and stretch a distance of 10.5 kilometers, connecting the Haroun station, in Cairo’s northern neighborhood of Heliopolis, to Cairo International Airport in the northeast of the capital.

The chief executive of Cairo’s metro company, Ali Fadali, could not be reached for clarification regarding the extent of Alstom’s role in this phase, or the reasons why Egyptian state authorities are still interested in doing business with the French company after it was found to be involved in acts of corruption in order to secure contractual agreements.

According to Al-Shorouk’s coverage, the metro company’s chief financial officer, Hesham Helmy, was arrested in April after allegedly accepting kickbacks from Alstom, reportedly to settle the French company’s financial accounts with Egypt’s state-owned National Authority for Tunnels (NAT), which presides over the metro company.

The privately owned Youm7 news portal reported that Helmy was arrested from his office by a force from the state’s Administrative Control Authority, who accused him of accepting bribes. Al-Shorouk reported that the chief of Alstom Egypt had resigned following the incident, and has since been replaced.

Officials from Alstom Egypt could not be reached for comment on these claims, however.

“We do not cover up acts of corruption,” Minister of Transport Galal Saeed told Youm7. “He who makes mistakes must bear responsibility for his mistakes. There is no room for corruption and the corrupt must bear the results of his corruption.”

According to domestic law, the Egyptian state outlaws contractual dealings with any company found guilty of bribing any governmental entity or authority.

Nonetheless, the NAT (which is administered by the Ministry of Transportation) has not excluded Alstom from its contractual agreements and from construction works for the Cairo metro grid.

In March of this year, Alstom confirmed that it signed a contract with the National Authority for Tunnels (NAT) for the extension of Cairo metro line 1 from the Marg to the New Marg station. Alstom’s share of the contract is reported to be 12 million euros.

Furthermore, in January 2015, Alstom confirmed that it had been awarded a contract worth 100 million euros by Egyptian National Railways Authority to supply signaling equipment for the Beni Suef-Assiut line.

According to a press release issued by America’s Department of Justice, in December 2014, Alstom pleaded guilty and agreed to pay a fine amounting to US$772,290,000 to resolve legal charges pertaining to a global scheme involving the payment of tens of millions of dollars in bribes to officials in countries including Egypt, Indonesia, Saudi Arabia, and the Bahamas.

Alstom officials admitted to paying at least 5 million euros in bribes in connection to the Nubaria and Tebbin power stations, in order to secure or retain contracts for these and other electricity generation projects across the country.

Despite the incriminating evidence, the Egyptian Electric Holding Company had agreed to sign a contract with Alstom in January of this year to develop the country’s electrical grid.


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