Algeria jails ex-officials, fines foreign firms in highway graft case

By Hamid Ould Ahmed

By Hamid Ould Ahmed

ALGIERS (Reuters) - An Algerian court on Thursday jailed 14 people, including former officials and businessmen, and fined seven foreign firms from Europe, Asia and Canada in a trial over corruption in the construction of a major cross-country highway.

The $13 billion highway project became one of several graft scandals involving local officials and foreign firms that are being sent to trial to underline the OPEC state's commitment to rule of law as it seeks to attract more foreign investment.

Thursday's convictions included a 10-year prison term and three-million-dinar ($35,000) fine for Chani Medjdoub, an adviser to a Chinese firm, and Mohamed Khelladi, a former public director of highway program, the state news agency APS said.

APS said Judge Tayeb Hallali also sentenced two former officials at the public works ministry to seven years in prison for bribery, while a former intelligence officer was given a three-year term for his role in the case.

The court acquitted a former secretary general at the same ministry of the same charges.

Hallali fined seven foreign firms 5 million dinars ($55,000) each. Those included Chinese, Japanese, Canadian, Swiss and Spanish contractors.

The highway, originally begun in 2006 after being awarded to a foreign consortium and still under construction, is to run 1,200 km (745 miles) between the large North African state's western border with Morocco and eastern frontier with Tunisia.

But the project mushroomed into a major scandal as it ran into repeated delays because of corruption investigations.

In another graft scandal involving foreign suppliers, a group of former top officials from the Algerian state oil company Sonatrach, including an ex-chief executive, went on trial last month.

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

All defendants in the two cases have denied wrongdoing.

The trials come at a sensitive time for the Algerian government as it seeks to cope with the impact of sliding crude oil prices and lure more investors to its lifeblood energy sector. Oil and gas exports comprise 97 percent of sales abroad.

Algeria, which relies heavily on oil and gas revenue for the state budget, was ranked 100 out of 177 nations in Transparency International's Corruption Perceptions Index for 2014.

(Editing by Patrick Markey and Mark Heinrich)