Canadas SNC-Lavalin Named to Win Big Bridge Award, But Infrastructure Chief is Out
Even as it copes with continuing fallout from alleged bribes by former executives that have led to federal fraud charges against the firm, SNC-Lavalin was buoyed by its selection, announced by federal infrastructure officials on April 15, as preferred bidder for a coveted public-private contract to rebuild a key bridge crossing in Montreal.
Some observers speculated that the government award to the SNC-Lavalin-led team signals a vote of confidence by the government and a likely settlement of the case brought in February. A trial date was pushed back to July 3 from earlier this month.
But Hisham Mahmoud, the infrastructure group executive who the Montreal company praised for the apparent win of the Champlain Bridge design-build-finance-operate contract, will soon be gone in an executive suite reshuffling apparently tied to his group's performance struggles since he joined in 2013.
SNC Lavalin announced on April 15 that Mahmoud "will move on to the next steps" in his career, and will leave the company on May 1. He could not be reached for comment.
Mahmoud is among several other top executives affected by the firm's C-suite changes.
SNC-Lavalin was selected by the federal infrastructure ministry for the replacement span across the St. Lawrence River, which is set to open in 2018.
The firm did not disclose the value of the award, since it is structured as a public-private partnership with terms still under negotiation. Dundee Securities construction sector analyst Maxim Sytchev estimates the award will be between $2.5 billion and $4 billion, but likely on the lower end. Consortium members include ACS Infrastructure Canada Inc., HOCHTIEF, Flatiron and TY Lin International.
The venture beat out proposals led by a Kiewit venture that includes Skanska, Macquarie, WSP Canada, Buckland & Taylor and Parsons Brinckerhoff, and an OHL Infrastructure Inc.-led team that includes Samsung E&C AMerica Inc., Acciona, Hatch Mott MacDonald, Dessau and Ramboll Denmark A/S.
The ministry said that all members of the SNC-Lavalin team were in compliance with the government's "integrity framework" for public sector bidders. There was speculation by investors and others that the government might bypass SNC-Lavalin because a conviction on the federal charges would have required its debarment from federal work for 10 years.
Denis Lebel, federal infrastructure minister in Quebec, told Canadian media that the agency had a "rigorous verification," and that it was working with "facts, not accusations."