British construction firms fined £129.5m

Posted On Monday, 28 September 2009 02:00 Published by
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More than 100 British construction companies have together been fined £129.5m for collusion on public and private sector contracts.

LONDON - More than 100 British construction companies have together been fined £129.5 million for collusion on public and private sector contracts, Britain's consumer watchdog said.

The combined fine, worth the equivalent of €143 million or $211 million, was handed down by the Office of Fair Trading.

"The OFT has imposed fines totalling £129.5 million on 103 construction firms in England which it has found had colluded with competitors on building contracts," the watchdog announced in a statement.

"The OFT has concluded that the firms engaged in illegal anti-competitive bid-rigging activities on 199 tenders from 2000 to 2006, mostly in the form of cover pricing."

The watchdog added that so-called "cover pricing" involved one or more bidders securing an articifially high price from a competitor company in order to win a building contract and give the appearance of competition.

The practice "gives a misleading impression to clients as to the real extent of competition", the OFT said.

"This distorts the tender process and makes it less likely that other potentially cheaper firms are invited to tender," it added.

The OFT said it had uncovered such activities on building projects worth more than £200 million, including schools, hospitals, apartment blocks and housing refurbishments.

Several major construction companies were fined including Balfour Beatty and Carillion. The largest single fine, totalling £17.9 million, was handed down to Kier Group.

Source: AFP

Publisher: I-Net Bridge
Source: I-Net Bridge

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