Court seeks to withdraw Brazil probe firm contracts

Wednesday, November 26, 2014

Brazil's federal audit court TCU is pressuring the government to withdraw public construction contracts where irregularities such as poorly executed or alleged overpriced services have been discovered.

One of the main projects being investigated involves some 538mn reais (US$215mn) in "overpricing" for work on the Norte-Sul railway, one of the many projects under the country's growth acceleration plan, PAC, local daily Valor Econômico reported.

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Of this amount, the paper said, nearly 185mn reais was paid out to three of the several local engineering companies being investigated as part of the Operation Car Wash corruption probe centered on state-run oil company Petrobras. The three are Constran, Queiroz Galvão and Camargo Corrêa, it said.

This investigation goes far beyond Petrobras. Besides railway works, the court is investigating roadworks, waterworks, subway construction and other projects, the report said.

Besides the Norte-Sul project, the TCU is probing four other Queiroz Galvão projects.

They include the Vertente Litorânea water supply pipeline in Paraíba state (33mn reais "overpricing"), the Sertão water supply channel in Alagoas state (37mn reais), the south metro line of Ceará state capital Fortaleza (44mn reais), and the construction of federal highway BR-448 in Rio Grande do Sul state (56mn reais)

The latter was a partnership with OAS, the report said.

The other companies under investigation as part of Operation Car Wash are Galvão Engenharia, Engevix, Mendes Junior, Odebrecht, UTC Engenharia and IESA.