Skanska and Techint Investigated in Bribery Skandal

Argentina's Techint and the Swedish transnational, Skanska, which worked together on the Camisea pipeline and Malvinas plant, are in the center of a money laundering and bribery scandal.

As reported in the Economist, Techint controls another gas pipeline in Argentina, called Transportadora de Gas del Norte (TGN), which the government paid with a trust fund to expand a pipeline carrying gas from Bolivia. Techint awarded contracts to Skanska which was later found to have evaded taxes by obtaining $400,000 in receipts from a shadow company with no employees, called Infinity. An internal Skaska investigation found that the company had paid $4 million to 23 different companies services never rendered. Seven of Skanska's managers in Argentina have been arrested. One politician estimates that $25 m of the $285 m price tag for the pipeline was improperly spent. The investigation into the laundering is looking into the involvement of Argentina's planning minister and has caused a scandal within President's Kirchner's government.

Recordings of conversations between the internal auditor and commercial manager of Skanska in Argentina suggest that the corruption scheme was used in Peru with contracts of up to $1.8 m. Skanska's recent projects in Peru include the engineering and construction of the flowlines in Block 88 and the duct system for the submarine gas terminal in Pisco.

Malvinas: Corners Cut in Corrosion Prevention

In a piece called "Camisea: complicidades y negligencias," reporter, Herbert Mujica Rojas, brings to light Report No. 080-2005-CR/JVR from May 2005, to Peru's Congressional Committee for Fiscalización y Contraloría. The commission found evidence that the consortium Sade Skanska Latintecna JJC (today known as Skanska Peru) did not comply with technical specifications for corrosion prevention in the high temperature pipelines for the Camisea Gas Project and that this was known by Plus Petrol. OSINERG aknowledged the claim made by Skanska subcontractor, Eldaco SAC, the company hired to carry-out Cathodic protection of the high temperature pipelines in Las Malvinas.

The Commission report concludes that OSINERG knew this when it issued a report distorting and hiding the truth by referring to out-of-date Technical Standards when it said that it had detected no violations with respect to the security of the installations. It also accuses the Director General for Hydrocarbons and the Ministry of Energy and Mines of negligence in making claims about the project that contradicted the evidence.

Apparently, Skanska was responsible for building the Malvinas plant, where the gas from the San Martin and Pagoreni gas fields are collected, separated, and sent through the pipeline. Malvinas has the capacity to process 440 million cubic feet of natural gas and 30 thousand barrels of gas condensate each day. Skanska subcontracted Eldaco to apply cathodic protection to pipes that handle high temperature gas (>600ºC). The technical specifications of the treatment were to apply one layer of inorganic zinc and a second layer of silicone to the pipes, both necessary to prevent premature corrosion of the pipes and explosion of the volatile contents. Eldaco claims that Skanska, running behind in completion of the plant, cut corners and ordered the subcontractor to only apply the zinc coating, thus violating project specs. An Eldaco manager provides an account of this in the comments of this article in Servindi.