14 jailed and foreign firms fined $390mn in Algeria’s ‘scandal of the century’

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Scandal concerns highway that was supposed to have been built for $6bn but could now cost up to $17bn

Algerian President Abdulaziz Bouteflika sits in his wheelchair as he is sworn as Algeria's President for a fourth term in April 2014 (AFP)
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Friday 8 May 2015 17:13 UTC
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An Algerian court has sentenced 14 people to prison and fined seven foreign firms in a high-profile corruption case, dubbed the "scandal of the century" by local media.

The ruling, issued on Thursday, found the defendants guilty of corruption, money laundering and embezzlement of public funds, in connection with the construction of a key highway.

The project – which was initially forecast to cost $6bn – is one of several corruption scandals involving local officials and foreign firms to rock the country in recent months, as the OPEC member state tries to stress its commitment to the rule of law in order to attract more foreign investment in light of falling global energy prices, Reuters reported.

Judge Tayeb Hallali ruled that seven European, Asian and Canadian firms were all found guilty and ordered them to pay $56.4mn each.

The Algiers criminal court also sentenced Chani Mejdoub, a financial consultant who also holds Luxembourg nationality, and Mohamed Khelladi, a former high-ranking official at the ministry of public works, to 10 years in prison.

The pair - who have already been behind bars for several years - were also ordered to pay a fine of 30mn euros ($33.8mn) each. The court also seized their property. A businessman and another former official at the public works ministry were each sentenced to seven years in jail.

The highway of bribes

Three-year jail sentences were handed to two other defendants, including a former secret service colonel who also worked for the justice ministry.

Eight other defendants were given a one-year suspended sentence each. Two others were acquitted.

Work on the motorway started in 2006 and was scheduled to last four years at a total cost then of $6bn but the construction, allocated to a consortium from Japan and another from China, has yet to be completed.

Officials said the cost has risen to $13bn while other sources put the final bill at $17bn.

Press reports have said bribes worth $5bn were paid during the construction of the 1,200-kilometre (730-mile) east-west highway which runs through northern Algeria and was due to connect Morocco and Tunisia.

Public works minister accused

During the trial a defendant accused former public works minister Amar Ghoul - who currently holds the transport portfolio - of having pocketed a quarter of the kickbacks. Ghoul has denied the claim.

Similar allegations were made against former justice minister and foreign minister Mohamed Bedjaoui.

President Abdelaziz Bouteflika considered the highway one of his flagship projects before it became marred in controversy.

The corruption trial opened in mid-April, the second of its kind since March, when an Algerian court began hearing another case against former executives at Algerian state energy giant Sonatrach, also involving foreign firms.

A court south of Algiers has similarly started a trial against the owners of Algeria's former largest private lender, Khalifa Bank.

All defendants in the two cases deny wrongdoing.