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Peru to bar Odebrecht From Public Bids With New Anti-Graft Rules

A sign on the offices of the Odebrecht construction conglomerate in Lima, Peru, June 28, 2016.
A sign on the offices of the Odebrecht construction conglomerate in Lima, Peru, June 28, 2016.

Peru said on Wednesday that Odebrecht SA and other companies involved in corruption will not be able to bid on public work contracts, a week after the Brazilian builder acknowledged distributing $29 million in bribes in the Andean country.

The government is changing public contracting laws to ensure that companies that have been penalized for corruption or that have admitted to bribing officials cannot compete on projects, said Prime Minister Fernando Zavala.

“They won't be able to participate in public tenders,” Zavala told the media when asked if that included Odebrecht.

The announcement appeared to end Odebrecht's nearly four-decade role as a successful bidder on public works projects in Peru, the first country outside Brazil where it ventured and home to some of its most ambitious projects, from a highway that crosses the Amazon to a tunnel that pumps water through the Andes.

Zavala said the government would decide on a case-by-case basis what to do with billions' worth in contracts already awarded to Odebrecht as local prosecutors determine if they were won with bribes.

Odebrecht did not immediately respond to requests for comment.

The family-owned conglomerate is at the center of a growing corruption scandal in Latin America after it said in a plea deal in the United States that it doled out $439 million in bribes to public officials and their intermediaries in countries outside Brazil, according to U.S. court documents.

The plea deal did not name the officials who took bribes in Peru or the projects involved.

With several executives in prison in Brazil and its debt mounting, Odebrecht is not expected to bid on new projects anytime soon.

However, Zavala's comments could help the government firm up its stance against corruption after President Pedro Pablo Kuczynski faced criticism for appearing to defend Odebrecht by saying that not all of the company was corrupt.

On Tuesday, Panama said it was canceling a $1 billion hydroelectric contract awarded to Odebrecht in recent years and would ban the company from future projects until it cooperates with local authorities.

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