Firms accused in price-fixing probe

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Construction giants Balfour Beatty and Carillion are among the 112 firms alleged to have taken part in a cartel to fix prices when bidding for business.

The OFT said more than 40 companies had already admitted price-fixing in the inquiry so far, which first started after an initial complaint in the East Midlands.

Another 37 firms out of the 112 have applied for leniency, according to the OFT.

The inquiry spans 240 alleged cases where firms have colluded to inflate prices during a tender process, covering both the private and public sector, including building contracts for schools, universities and hospitals.

In a minority of more serious cases under investigation, the OFT alleged some firms agreed to make "compensation payments" to unsuccessful bidders, accompanied by false invoices.

The investigation follows a similar inquiry in the roofing industry by the OFT between 2004 and 2006, covering projects including the Bullring shopping centre in Birmingham.

John Fingleton, OFT chief executive, said: "Cartel activity of the type alleged today harms the economy by distorting competition and keeping prices artificially high.

"This investigation, together with the OFT's previous decisions in the roofing sector, will hopefully send out a strong message to the construction industry about the seriousness with which we view suspected anti-competitive behaviour. Businesses have no excuses for not knowing and abiding by the law."

The OFT said Thursday's investigation was sparked by a complaint from a health authority in the East Midlands, but added it "quickly became clear from the evidence that the practice of cover pricing was widespread".