UK competition watchdog fines construction firms $74 mln for rigging bids

Road construction signage outside the Bank of England in the City of London financial district, in London
Road construction signage outside the Bank of England in the City of London financial district, in London, Britain, January 26, 2023. REUTERS/Henry Nicholls

March 23 (Reuters) - Britain's competition watchdog on Thursday fined 10 construction firms a total of nearly 60 million pounds ($74 million) for rigging bids for demolition and asbestos removal contracts for public and private sector projects.

The Competition and Markets Authority (CMA) started the large-scale investigation in 2019 and in June last year provisionally found that the 10 firms had colluded with each other on prices through illegal cartel agreements, rigging bids.

"The bids were rigged by one or more of the construction firms agreeing to submit bids that were deliberately priced to lose the tender," the regulator said.

The CMA found the collusion took place over a period of five years and affected 19 contracts worth more than 150 million pounds for demolition work in London, the Southeast, and the Midlands.

This practice, known as "cover bidding", can result in customers paying higher prices or receiving lower quality services, it added.

Construction firms Keltbray, Brown and Mason and Cantillon were among the few companies who admitted to their involvement in June, and were handed reduced fines by the regulator.

Keltbray, which has been fined 16 million pounds, said it was disappointed with the penalty amount and intends to appeal the CMA's decision.

"Keltbray did not instigate any infringement activity or benefit financially from the infringements, and therefore believes the intended penalty is excessive when compared to Keltbray’s level of involvement," the company said in a statement.

Brown and Mason said it had cooperated with the CMA throughout the investigation, and that no customers had been adversely affected by its conduct.

London-based Erith, which was fined about 17.6 million pounds, and Cantillon did not immediately respond to Reuters' requests for comment.

CMA has also disqualified three directors who were involved in the activity.

($1 = 0.8132 pounds)

Reporting by Radhika Anilkumar in Bengaluru; Additional reporting by Anchal Rana; Editing by Sohini Goswami and Jan Harvey

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