An engineer for the City of Montreal admits he and a colleague vacationed in Mexico with a former construction tycoon who was one of the top recipients of contracts from City Hall over the last six years, and whose testimony over the last few days has rocked Quebec's corruption inquiry.

Retired engineer Luc Leclerc told CBC's French-language news service that he thinks he covered his flight and accommodation, but he doesn't remember exactly and "it's not impossible" that his costs were paid.

Leclerc spoke to Radio-Canada as the Charbonneau commission, Quebec's public inquiry into construction industry corruption, continued Monday.

Lino Zambito, the former construction entrepreneur, told Radio-Canada that he paid for Leclerc's trip. Another municipal engineer, Gilles Surprenant, was also on the golf trip to Puerto Vallarta, Mexico.

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Former City of Montreal engineer Luc Leclerc admits he vacationed with Zambito in Mexico. (Radio-Canada)

Leclerc acknowledged that Zambito did pay for some things at the Marival Resort & Suites, including drinks.

The vacation took place in 2002. Around the same time, Leclerc was the city engineer charged with overseeing Zambito's first contract with the city. Zambito's young company, Infrabec Construction, was hired to do sewer work along Notre Dame Avenue.

Surprenant was the municipal engineer in charge of plans and specifications for construction contracts.

In his second day of bombshell testimony at Quebec's corruption inquiry, Zambito testified Monday that construction companies that landed city contracts paid a one per cent "tax" that got funnelled to Surprenant. The businessmen jokingly referred to it as the "Taxe Pour Surprenant," or TPS, which are the French initials for the GST.

Engineer denies Mafia gave him instructions

Zambito had testified last week that his company was among about 10 that conspired to rig the bid prices on city contracts over the last several years. Infrabec and other players in its field, mainly civil engineering and waterworks, would divvy up municipal business between themselves and designate one company to put in the winning bid while the rest would all bid higher, Zambito said.

He recalled how, in 2002 or 2003, Leclerc was overseeing Infrabec's work on the Notre Dame Avenue sewer. The company wasn't yet part of the "clique of entrepreneurs" who constituted the "closed market" for bidding on such work, and Infrabec landed the contract by putting in a very low bid basically at cost and undercutting the cartel, Zambito said.

"The first exchanges were, you could say, polite," he recounted of his discussions with Leclerc. He "made it known to me, while chatting to him, that I'd landed a contract with the City of Montreal, that mine was a new company, and that there was word that the other entrepreneurs weren't happy that I was getting a contract in Montreal. And he made me understand that he was sort of charged with making life difficult for me during the execution of my work.

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Lino Zambito's testimony at Quebec's corruption inquiry has blown open details of how construction companies conspired to rig the price of contract work for the City of Montreal. (CBC)

"He said to me, 'Oh, surely people in the Mafia won't be happy that you're in Montreal.' "

Leclerc told Radio-Canada that he was only joking about making things difficult, and that he never said it was the Mafia who had instructed him to do it.

"Mr. Zambito maybe interpreted things. Me, when I met Mr. Zambito for the first time, I told him, 'I'm sure your competitors aren't going to be happy that there's a new player on the scene,'" Leclerc said.

"I remember very well having said that, and having joked by saying, 'If I made your life difficult, I'm sure they'd be very happy.' It was a joke. I was talking about his competitors. Saying I had a mandate to make his life difficult — I never had a mandate from anyone, and I never talked about construction with a member of the Mafia."

Leclerc said he will be called to testify at the Charbonneau commission. He worked for the City of Montreal for 38 years as an engineer and retired

Zambito is scheduled to testify for a few more days, a commission lawyer said Monday. His company received at least $68.7 million in contracts from the City of Montreal between 2002 and 2011, when Infrabec went bankrupt after Zambito and his dad were charged with fraud in the awarding of public contracts in the north shore Montreal suburb of Boisbriand.