The World Bank has temporarily barred a unit of Canadian engineering and construction giant SNC-Lavalin from bidding on new projects following a corruption investigation into the Padma bridge project in Bangladesh.

In April 2011, the WB agreed to lend Bangladesh $1.2 billion to build a 6-km bridge over the river Padma to link Dhaka, and the country's main port.

A unit of SNC-Lavalin had bid for a project, where the winning bidder was to act as the engineer for the Bangladesh government for supervising the contractor responsible for the overall bridge construction project.

Citing alleged corruption in the bidding process, the WB had in September 2011, launched an investigation and requested the Canadian authorities to search the company's Ontario office.

Although the contract to build the bridge has not yet been awarded, the temporary suspension is not a final decision until the investigation is complete.

The company said it had launched its own internal investigation when the matter was first brought to their attention. "We launched our own internal investigation when this matter was first brought to our attention and we will continue to cooperate fully with the World Bank on this matter," said the company's interim CEO, Ian Bourne.

"We respect the World Bank's decision to declare a temporary suspension on the subsidiary affected until this matter is concluded. We should be clear, however, that all ongoing projects and new bids by other subsidiaries and divisions will continue as usual," he added.

The temporarily suspension from the WB comes less than a week after SNC-Lavalin's CEO Pierre Duhaime resigned on a payments scandal.

Duhaime signed a $56 million payment to undisclosed agents for projects that did not exist. Canadian police are now investigating the payments.

Based on its own internal findings, SNC-Lavalin said it did not believe the payments, which were made through its Tunisian subsidiary, were made to Libya, where the company has worked on several projects.

SNC-Lavalin was founded in 1911 and reported revenues of C$6.3 billion ($6.4 billion) in 2010.

This is not the first time that SNC-Lavalin has been accused in a corruption scandal. The company was embroiled in an Rs374.50-crore corruption scandal related to the renovation and modernisation works of two hydro electric power stations in Kerala. 

Several politicians, including former ministers G Karthikeyan of Indian National Congress, Pinarayi Vijayan, the first Politburo member in the CPI(M) history were prosecuted in the corruption case.