March 30, 2017 / 8:52 PM / 4 months ago

Odebrecht scandal could threaten public-private partnerships, IADB says

2 Min Read

File photo: Luis Alberto Moreno, president of the Inter-American Bank, speaks during a news conference in Managua, Nicaragua April 21,2016.Oswaldo Rivas

ASUNCION (Reuters) - The Odebrecht corruption scandal could threaten public-private partnerships that are needed to build infrastructure throughout Latin America, the president of the Inter-American Development Bank (IADB) said on Thursday.

The Brazilian builder admitted to paying hundreds of millions of dollars of bribes in 12 countries, mostly in Latin America, as part of a settlement with U.S. and Brazilian prosecutors in December.

"There is no doubt that the Odebrecht case has done an enormous amount of damage to the company and to many governments, but the greatest damage around this scandal is the idea that public-private alliances are bad," IADB President Luis Alberto Moreno told journalists.

Peru President Pedro Pablo Kuczynski has said corruption investigations are slowing private investment. The Finance Ministry slashed Peru's growth outlook to 3.8 percent from 4.8 percent in January as what it called the "Odebrecht effect" stalled projects.

Other countries across the region are starting to investigate graft in large infrastructure projects.

Reporting by Daniela Desantis; Writing by Caroline Stauffer; Editing by Leslie Adler

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