Montreal suspends new contracts

04 October 2012

The executive committee of the Canadian city of Montreal has voted to suspend CA$ 75 million (US$ 76 million) in planned infrastructure contracts in the wake of revelations about bid rigging and Mafia links in the construction industry

Richard Deschamps, vice-chair of the Montreal executive committee in charge of infrastructure, confirmed planned road, water and sewer contracts would be shelved. The decision was made after an inquiry into corruption in the construction industry in the province of Québec heard an explosive testimony from a former industry executive detailing collusion, kickbacks and links to organised crime.

"We have heard declarations and allegations about certain individuals and we will hear about others. It's just begun. What we are doing is protecting the rights of taxpayers, we are taking charge of the situation, and we will try to do the best we can," Mr Deschamps said, adding that the decision to suspend new contract awards will not affect urgent repair work.

The Québec government has passed Bill 35 - a new law that gives authorities more powers to tackle corruption in the construction industry by increasing the fines that can be imposed and extending more powers to the province's construction regulator, the Régie du Bâtiment (RB).

Bill 35 tightens up the conditions that companies must meet before RB will issue a contractor's licence.

Mr Deschamps said the suspension of contract awards would allow Québec's new Premier, Pauline Marois, to look into the new law and its implications.

Operation Hammer

Quebec's construction corruption scandal exploded in late 2009, when the province's police force started L'Opération Marteau (Operation Hammer), an investigation into ties between organised criminal gangs and the construction industry, and price collusion between contractors. As the investigation progressed, it uncovered links between corrupt politicians, contractors, unions and organised crime.

The Charbonneau inquiry into the industry is hearing testimony from witnesses, and is scheduled to last at least until the end of the year.

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