Price-fixing in Lewisham?

The Office of Fair Trading (OFT) has accused 112 construction companies of rigging bids for contracts.

It said the firms colluded among themselves while bidding for contracts, leading to customers, such as local authorities, having to pay too much.

The regulator added that in a few cases firms entered into agreements whereby the successful tenderer would pay a sum of money to those that lost out.

It said 40 firms had admitted price fixing, and 37 had asked for leniency.

The cartel practice involved the use of false invoices.

Construction giants Balfour Beatty and Carillion are among those the OFT accuses of taking part… (link)

Earlier I saw on telly a very well groomed man representing the industry, that with exceptional calm and self-confidence explained that the companies paid by us to build our hospitals and schools have not been involved with price-fixing practices to inflate prices but because they didn’t want those jobs and didn’t want to upset their prospective future clients by not bidding, so they were shooting high in the hope that they would not get the job but would still be considered in the future.

I admired the way he kept cool and insisted on that, he’s obviously been coached in keeping a line that beggars belief with a straight face. His coach must have been proud of him.

In spite of this particular kind of admiration that he inspired me, my mind did go to the traditional way that Japanese managers adopt in these cases to safe-guard their honour, self-disembowelment with a traditional sword.

After all, taking money away from hospital budgets means that somebody will not be able to be treated for their conditions and could sometimes even die.

It’s only a few days that here in SE London we’ve been consulted on how much of the local NHS should be dismantled with options of the like of the closure of the local A&E in Lewisham. They are seriously claiming that a borough with a quarter million people can do without an accident and emergency.

This proposal sounds all the more incredible since Lewisham Hospital just opened a very swanky new building, 7 storeys or wavy modern architecture, it came with a £60m price tag and it is such a generous space that one of the floors is completely empty.

Carrillion, the company that built it not just managed to get the usual 30 years contract for the maintenance of the building, but thanks to an innovative deal they also get to supply the Hospital for the next 30 years.

Carrillion is also one of the companies that admitted of price-fixing.

I think that it is reasonable to ask ourselves if the current financial deficit that could lead locally to the loss of critical services could have been generated by this and other recent contracts.

Of course another thing that we must ask ourselves is whether it was wise to spend such vast sum on a building when the Hospital is in such deficit that closure of A&E is one of the options.

I think that now our local politicians should make an effort to bring an investigation over the Hospital deal and see whether there were irregularities at bidding and if that would turn up to be the case, to try to recover money from the contractors so that part of the deficit could be covered and maybe some of our services be saved from closure.

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2 Responses to “Price-fixing in Lewisham?”

  1. links for 2008-04-18 « Someday I Will Treat You Good Says:

    […] Price-fixing in Lewisham? Max thinks there’s a job of work for the Healthier Communities Select Committee […]

  2. Construction cartel fined « . Says:

    […] Last year we discovered that the biggest construction companies of the land had formed an unethical and unlawful cartel to squeeze more money out of public contracts, I have quite a strong opinion on this matter as I wrote back then here. […]

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