Egypt probes corruption in state bidding process

Ahram Online , Tuesday 30 Dec 2014

Former chairman of Cairo-based PGESCo has been tied to accepting millions in kickbacks and is being investigated by Egypt's electricity ministry after being connected to cases in France and the United States

A project by PGESCo in Nubaria industrial zone near Alexandria governorate (Photo: courtesy to PGESCo)

Egypt's electricity ministry began an investigation into bribery charges raised in the United States against former chairman of Cairo-based PGESCo, Assem El-Gawhary, according to statements from electricity minister Mohamed Shaker, to Reuters Aswat Masriya on Monday.

Earlier this month, El-Gawhary, the former chairman of PGESCo, a joint venture between Egypt's state-owned electricity company and American-based construction company, Bechtel Corp, pleaded guilty to accepting $5.2 million in kickbacks to manipulate the bidding process for state-run power contracts in Egypt, the US justice department said in a statement published 4 December.

El-Gawhary, who is a dual US and Egyptian citizen, accepted the kickbacks from three power companies from 1996 to 2011, the statement said. The former chairman was sentenced to 42 months in jail and to forfeit the $5.2 million.

Last week, French company Alstom SA pleaded guilty to bribing government officials to win business in countries and agreed to pay $772 million in fines, the US justice department said in a statement published 22 December. Among these countries was Egypt where the company bribed El-Gawhary’s PGESCo.

PGESCO currently holds tens of projects across Egypt as well as other projects in Iraq and Libya.

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