€ 4,4 billion UK construction cartel
25 March 2008
The Uk's office of Fair Trading (OFT) has uncovered bid rigging cartels involving 57 construction companies working on “thousands of tenders” worth a total of UK£ 3 billion (€ 4,4 billion).
The OFT's statement comes after a two-year investigation into the construction industry in England, focussing particularly on the Yorkshire and Humberside areas in the North of England, and the East Midlands. The sectors investigated include house building and commercial and industrial construction. It has not encompassed the civil engineering and infrastructure construction, repair and maintenance sub-industries.
It says it uncovered evidence of bid-rigging practices such as ‘cover pricing', whereby unrealistically high bids are put in to give the impression of competition. There is also evidence of companies paying competitors compensation payments in exchange for putting in a cover bid.
The OFT has the power to fine companies found to be a member of a cartel up to 10% of its annual worldwide turnover. Of the 57 companies investigated, 37 have applied for reduced fines under the OFT's leniency programme. The OFT says that in view of the quantity and quality of evidence gathered to date, the leniency programme is now closed to the remaining 20 companies under investigation.
However, the OFT says companies that come forward with information outside the scope of its current investigation may still apply for leniency. These could include companies in construction-related industries or in the civil engineering sector.