Construction cartel fined

From today’s Times:

The Office of Fair Trading (OFT) today fined the construction industry £129.5 million after an investigation into bid-rigging between companies tendering for public sector building contracts.


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.

Here in Lewisham we are personally touched by this story as one of the companies found guilty and fined is in fact Carrillion, which built the new block at Lewisham Hospital.

From today’s article in the Times:

Tristan Meears-White, a lawyer with Watson Burton, who represented 14 of the smaller companies, told The Times: “Bearing in mind the huge resource the OFT has thrown at this four-year case – they brought in a lot of agency staff, which must have cost them a fortune, this is not a massive fine.

“It might sound like a lot, but relatively speaking its not been the most profitable return for four years’ work.”

Obviously, I strongly disagree with this lawyer, malpractice has been unveiled and large sums have been saved to the taxpayers by preventing this happening again (at least for a while) on further contracts.

In the current economic climate it would have been irresponsible to push a few of them under, as the seriousness of the charge would have called for. Those involved represent large part of the construction sector of this Country and his clients got away with it because it’s not in the public interest to punish them further, but it was in the public interest to unearth and disclose the dishonesty of his clients.

Lord Mandelson has already taken a position, and it goes in the opposite direction of mine, he sent a guidelines note to Government departments saying that companies involveved should not be barred from future contracts.
The note is redundant as today’s Court order doesn’t bar them from anything and anyway we are here speaking of basically most of the the companies with the capability to run for large public contracts, so if you cut them out you’re left with no one.
The note Lord Mandelson should have sent should have contained names and surnames of those people involved in these frauds against our shools and hospitals’ budgets, the people that we now know should never be allowed anywhere near public contracts again.

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It is also still the case, and a stronger case, for what I called for at the time of the unearthing of this scandal, that we should be asking the Office of Fair Trade if Lewisham Hospital was one of the contracts they know of having been rigged, and if that would turn out to be the case then we’d have to look at the contract again, because it’s an ongoing one, it was not only for the construction of the new Hospital building, but also 30 years of facilities’ management services.
And with the current state of the finances at Lewisham Hospital we’d surely do with some more money.

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