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Sale of Aecon blocked on security grounds

Work on the new airport terminal (Photograph by Akil Simmons)

The $1.5 billion sale of Bermuda airport contractor Aecon to a Chinese firm was yesterday blocked by the Canadian government on the grounds of “national security”.

A block on the controversial deal between Aecon and Chinese-owned CCCC International Holding was confirmed by the office of Canada’s innovation minister Navdeep Bains.

The takeover of Aecon by CCCI, part of a Chinese state-owned company, was put on hold in February so the federal government could conduct a national security review of the deal.

Aecon said at the time it had received notice from Bains’ office indicating that the federal cabinet had ordered a continuation of the national security review under section 25.3 of the Investment Canada Act.

That section allows the government to order a review if the minister “considers that the investment could be injurious to national security”.

The opposition Conservative Party had put pressure on Justin Trudeau’s Liberal government for a national security review of the takeover.

Tony Clement, a Conservative MP, told the House of Commons in February: “The Chinese company poised to take over Canadian construction giant Aecon is rampant with corruption and has just been blacklisted by Bangladesh for that very reason.

“We know Aecon has been awarded numerous sensitive Canadian government contracts, including working with our military and in the nuclear sector.

“When Bangladesh is sounding alarm bells, why is Canada staying silent and not calling for a full national-security review of the takeover of Aecon?”

Aecon chief executive John Beck said at the time that the company provided construction and refurbishment services to the nuclear industry but was not involved in sensitive military installations.

He added that Aecon did not own any intellectual property or sensitive technology related to nuclear energy.

The acquisition of Aecon by the Chinese firm had already cleared most hurdles after the deal was backed by Aecon shareholders, and received court approval and clearance from Canada’s competition regulator.

The 140-year-old company has worked on several Canadian landmarks, including the CN Tower, Vancouver’s SkyTrain and the Halifax Shipyard.

CCCC International, also known as CCCI, is the overseas investment and finance arm of China Communications Construction Company, one of the world’s largest engineering and construction groups and majority owned by the Chinese government.

The World Bank in 2009 banned CCCI from bidding on construction projects for eight years due to a bid-rigging scandal in the Philippines.

The state-owned company has also been linked to the construction of artificial islands in the South China Sea, which has caused tension between China and several Asian countries.

Canadian Crown Corporation and its subcontractor Aecon struck a $250 million deal in 2014 with the Bermuda Government to build a new airport.

The agreement meant the company would finance the rebuilding of LF Wade International Airport in return for a contract to run the facility for 30 years and collect any revenue raised.

The decision sparked fury in the then-Opposition Progressive Labour Party.

A demonstration outside the House of Assembly in December 2016 to prevent the deal being discussed turned ugly, with protesters pepper-sprayed by police and officers assaulted.