Bombardier accused of corruption in S. Korea

The new bombardier aircraft CSseries is shown in Mirabel, Quebec as it is due to take off for the first time on September 16, 2013

South Korean prosecutors are accusing Canadian aerospace giant Bombardier of making gifts to local officials in the East Asian country as it pursued a metro contract, Radio-Canada public television reported Thursday.

The corruption allegations stem from gifts and free trips to Canada offered to civil servants and politicians from the Seoul suburb of Yongin, which chose Bombardier to build an elevated train system, Radio-Canada said, citing the investigation report.

The project itself also faces huge cost overruns.

From an original estimate of a little more than $1 billion when the project was first announced in the early 2000s, it could now cost $3.5 billion over 30 years to South Korean taxpayers.

"We thought it was going to be a metro, but the Yongin train has only one car, so we could say it's more like a bus," said Hyun Geun-Taek, a lawyer who filed suit against the project.

The 18-kilometer (11-mile) rail system has been in service since 2013.

Yongin, a city of nearly a million inhabitants, had chosen the technology proposed by a Bombardier-led consortium following the recommendation of South Korea's transport Ministry.

The project had expected nearly 183,000 passengers per day. But the system only transports about 20,000 passengers per day currently.

Bombardier categorically rejected the corruption allegations made following a special South Korean investigation in the public-private partnership between the consortium and the city of Yongin.

"They were not pleasure trips. There is a need to convince the people that our technology works well," said Bombardier vice-president of systems in northern Asia Serge Bisson.

"If it had been corruption, they would have charged us."

Investigators have yet to press formal charges against Bombardier, saying that the deadline to do so had expired. Bombardier said the move was due to the lack of proof.