Slap on the wrist for cowboy builders
The Office of Fair Trading has fined 103 building companies a collective £130m for illegal bid-rigging on public sector tenders.
Britain's Office of Fair Trading has fined 103 building companies a collective £130m for "illegal anti-competitive bid-rigging" on tenders worth £200m between 2000 and 2006.
The collusion involved cover pricing: submitting an excessively high bid to make a supposed competitor's seem more reasonable. Sometimes the chosen firm then made payments to peers who had made inflated bids. Kier received the biggest fine, £17.9m, followed by Interserve's £11.6m.
What the commentators said
Now we know why "public projects so often appear to be eye-poppingly expensive", said James Moore in the Independent: the construction industry's "massive con trick on the taxpayer".
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Construction industry lobbyists "should get bumper bonuses this year", said David Wighton in The Times. The fines could have been much higher. Clearly the OFT has been persuaded that higher penalties could push some firms over the edge, given that the industry is suffering the worst downturn in 20 years.
And that, said Andrew Hill in the FT, would mean even less competition. The offenders are being allowed to pay in installments "a sort of student loan approach to punishment".
Lord Mandelson has also urged the public sector not to exclude the companies involved from future projects, noted Moore. All in all "the worst bit of corporate cowboy building ... this century has resulted in a slap on the wrist ".
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
-
Christmas at Chatsworth: review of The Cavendish Hotel at Baslow
MoneyWeek Travel Matthew Partridge gets into the festive spirit at The Cavendish Hotel at Baslow and the Christmas market at Chatsworth
By Dr Matthew Partridge Published
-
Tycoon Truong My Lan on death row over world’s biggest bank fraud
Property tycoon Truong My Lan has been found guilty of a corruption scandal that dwarfs Malaysia’s 1MDB fraud and Sam Bankman-Fried’s crypto scam
By Jane Lewis Published