Top British builders fined millions for price fixing

They include Britain's leading construction firm Balfour Beatty and Kier, the company that it is building the new Supreme Court opposite the House of Parliament.

The Office of Fair Trading (OFT) today fined 103 construction firms a total of £129.5 million for colluding to force up the prices paid to build hospitals, schools, universities and housing developments.

The OFT uncovered is a series of local cartels, building firms ganging up to fix the price of projects and in some cases paying out as much as £60,000 from the proceeds of the artificially high contract price in "compensation" to "losing" fellow price-fixers.

It found the firms had illegally rigged 199 tenders from 2000 to 2006 on projects worth over £200 million.

The fines would have been greater but for the majority — 86 of the 103 firms — confessing their guilt and qualifying for leniency reductions of up to 65% in their penalties.

Kier received the highest single fine, of £17.8 million. The second largest was for Interserve whose contracts include a caretaking and maintenance role at Buckingham Palace as well as widespread build-and-manage contracts across the NHS, the Ministry of Defence and the education sector.

Balfour Beatty's fine of £5.1 million follows a string of controversies for the construction giant including being part of the failed Metronet Underground consortium, being fined by the Serious Fraud Office for bribery in Egypt and as the rail contractor involved in the fatal Hatfield rain derailment.

The Government however has ruled that the illegal price-fixers should not be further punished after their fines.

The Office of Government Commerce has ruled that local authorities should not blacklist the contractors because the scam was so widespread and firms that have "faced investigation can now be expected to be particularly aware of the competition rules".

Simon Williams, the OFT senior director who ran the case, said: "This decision sends a strong message that anti-competitive and illegal practices, including cover pricing, must cease."

The average fine in the investigation was £1.26 million or a little over 1% of the firms' total annual turnovers.