The World Bank Group has announced a 24-month sanction of France-based airport developer and operator ADP International (formerly ADP Management), a subsidiary of Aéroports de Paris.
The sanction consists of a 12-month debarment followed by a 12-month conditional non-debarment in connection with collusive practices as part of the Airports Madagascar Project and fraudulent practices as part of the Zagreb Airport Project.
The sanction stems from an investigation conducted by the World Bank Group’s Integrity Vice Presidency and highlights the institution’s efforts to promote high standards of integrity in International Finance Corporation (IFC)-financed projects.
This debarment only applies to ADP International and the companies it controls; it does not include within its scope Aéroports de Paris and its other subsidiaries, including TAV Airports companies.
A release by Aéroports de Paris said the sanction is part of an amicable settlement negotiated by ADP International, under which the company assumes responsibility for practices considered to be fraudulent and collusive during the calls for tender procedures organized for the award of concessions for Zagreb Airport in Croatia and Antananarivo and Nosy Be in Madagascar. The construction of all of these airports was partially financed by the IFC.
The matter was resolved through settlement agreements negotiated with the multiple companies involved. The settlements demonstrate how such agreements, and Bank Group sanctions in general, can be used to help promote better business practices by companies engaged in private-sector development projects.
At the end of the initial debarment period, and provided that certain conditions set out in the settlement agreement are met, the sanction of ADP International will become a conditional non-debarment. During this time, ADP International will be eligible to participate in projects and operations financed by institutions of the World Bank Group as long as it complies with its obligations under the settlement agreement. However, if the World Bank Group integrity compliance officer determines that the company fails to meet the specified conditions at the end of the debarment period, it will remain ineligible to participate in World Bank Group projects and operations until the conditions for release set out in the settlement agreement are met.
The Airports Madagascar Project, which is supported by IFC, provides partial financing for the design and development of the expansion and renovation works of the two main airports in Madagascar: Ivato International Airport and the Fascene Airport. According to the facts of the case, ADP International engaged in collusive practices by attending improper meetings with government officials between February 4, 2015 and May 4, 2015, during the tender for the 28-year contract for the concession to run the airports.
The Zagreb Airport Project, which is also supported by IFC, provides partial financing for a 30-year concession contract for the design, construction works, operation and maintenance of a new terminal within Zagreb International Airport. According to the facts of the case, ADP International engaged in fraudulent practices by failing to disclose to IFC that fees paid by the company, between June 10, 2011 and March 12, 2014, to a retained agent, in connection with the concession contract, were partially transferred to a non-contracted consultant.
The settlement agreement provides for a reduced period of debarment in light of the company’s cooperation and voluntary remedial actions. As a condition for release from sanction under the terms of the settlement agreement, ADP International has committed to adapt its group-wide integrity compliance program to reflect the principles set out in the World Bank Group Integrity Compliance Guidelines, and has agreed to implement and maintain the program as part of its business operations going forward, including at its sanctioned subsidiaries.