Brazilian federal police arrested four people on Friday including the chief executive of engineering group OAS in a new probe of suspected price-fixing and kickbacks on a long-delayed project to divert water to the drought-prone Northeast.
Police said they had evidence that a consortium of engineering companies working to redirect water from the São Francisco River had diverted 200 million reais ($51 million) of 680 million reais in contracts under investigation.
Police said their probe of the water project included a money launderer and a lobbyist involved in a larger investigation of state-run oil company Petrobras.
Federal prosecutors have accused dozens of engineering companies of forming a cartel to overcharge the oil company, formally known as Petroleo Brasileiro SA, and funnel the excess funds to executives and politicians as bribes.
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Brazil Energy Insight 
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