Revealed: French probe into bribery scandal involving KL’s MRT project

(Malaysia Now) – Authorities in France are investigating serious allegations of fraud and bribery linked to the Klang Valley Mass Rapid Transport (KVMRT) project, in what is seen as another corruption probe involving French and Malaysian interests under the Najib Razak administration following the highly publicised Scorpene submarine kickbacks case a few years ago.

MalaysiaNow has learnt that the scandal revolves around the MRT2 project, worth some RM692 million, with the focus on a company in Malaysia linked to its French conglomerate which has earned a reputation for fraudulent practices through the misrepresentation of safety and quality tests.

MRT2, also known as the Putrajaya Line, is the second phase of KVMRT, approved by the government in 2015.

It links towns and cities to the administrative capital of Putrajaya, spanning some 60km with more than 30 stations including connections to the future High Speed Rail (HSR) between Kuala Lumpur and Singapore.

Checks by MalaysiaNow with a source familiar with the recently launched investigation in Paris revealed a list of prominent names including an individual who was a top aide to a former prime minister, as well as a member of the royalty.

It is understood that at least three companies in Malaysia are believed to have entered the radar of anti-graft investigators in Paris.

One of them is Colas Rail System Engineering Sdn Bhd, linked to Colas Corporation (Colas SA), a French public-listed firm which has embarked on mega infrastructure projects in several countries including highways, airports and townships.

Colas’ subsidiaries in at least two African nations have been found to be involved in corrupt practices in the execution of contracts for major construction projects there.

Colas Rail System Engineering Sdn Bhd was set up in Malaysia in 2009 for the purpose of bidding contracts for Greater Kuala Lumpur, an ambitious urbanisation project that spans the capital city and the surrounding major metropolises in the Klang Valley.

The company engaged the services of a Hong Kong-based firm to oversee its construction projects in Malaysia.

In 2011, the Hong Kong firm helped Colas Rail establish CMC-Colas-Uniway, a triumvirate between Colas, CMC Engineering Sdn Bhd and Uniway.

Last month, the Malaysian Anti-Corruption Commission reportedly arrested three directors and two former directors of an engineering firm in an ongoing corruption probe involving the MRT project.

The case is being investigated under Section 16 of the MACC Act for soliciting and accepting bribes.

MalaysiaNow is attempting to contact the parties concerned for a response.

The investigation into Colas’ subsidiary in Malaysia is not the first for the French firm, whose tentacles are spread in more than a dozen developing countries in Asia and Africa.

Last year, Colas Djibouti reached a settlement with the US government to pay US$12.5 million after it admitted to supplying inferior concrete for use in the construction of a US Navy airfield in Djibouti.

Authorities had then accused the company of fabricating test results for the quality of the material used.

“In one particularly egregious example, in response to a request for an analysis of the water used in the concrete mix, Colas Djibouti provided an analysis for a store-bought bottle of drinking water,” the US Department of Justice said in a statement last year.

Earlier this year, Colas Madagascar was slapped with sanctions by the World Bank in connection with fraudulent practices relating to the expansion of airports in Madagascar. The World Bank, which partially financed the project, said the company had arranged for improper meetings with government officials during a tender for the 28-year concession to run the airports.