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Several of Britain's top building firms were handed fines running into millions of pounds today, after being found guilty of brazen scams to rip off the taxpayer and private developers.
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.
Reader views (11)
As far as I am concerned, the chairmen, directors and heads of those companies should be charged and prosecuted. Fines are clearly and woefully inadequate deterrents. In countries like the USA, criminal charges would definitely be brought. Why not also in the UK? - The answer, because those same company heads are part of the Establishment!
- Julian, London, 22/09/2009 23:23
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What a surprise, big business stealing from the tax payer! Yet again, the Government is spineless in not prosecuting these companies and their directors!
When will somebody stand up and say enough.
- Mike, Esher, Surrey, 22/09/2009 21:56
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Looking forward to the mugshots of these alleged scoundrels.
- Ted, London, 22/09/2009 14:57
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I've always wondered why gas and electricity companies are allowed to link their energy prices to the price of oil.
It all seems anti-competitive, particularly as most power stations are not oil-fired. What is the justification and why does the government permit it?
- Jools, London, 22/09/2009 14:06
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Just what will happen to this money? Will it just disappear into the labour party's coffers? It's OUR justic, and WE are entitled to know.
- Minority Working Person, London/England, 22/09/2009 14:06
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Why not prosecutions too??? The people involved should appear in court and face imprisonment.
- Ralph, London, 22/09/2009 14:05
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Councils, builders and developers have been colluding for years and we all know it.
- Never Eat Tuna Again, London, 22/09/2009 14:04
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Can't help wondering if any of these companies have MP's on their payrole.
- George, Cambridge UK, 22/09/2009 13:30
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Fraud and corruption amongst big city corporations has seemingly run riot under our nulav govt.
- Wa, Oxfordshire, 22/09/2009 13:09
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Fines? -They should have been criminally prosecuted for graft and corruption! -It was theft!
- Huggy, Cumbernauld Scotland, 22/09/2009 13:02
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Why am I not surprised.
- Shallotman, Basildon, 22/09/2009 09:40
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