Builders find $168 mil. for bid rigging

By Park Si-soo

The fair trade regulator said Thursday it fined 23 builders a combined 182.6 billion won ($168.8 million) for rigging bids for large-scale state projects.

The Fair Trade Commission (FTC) said they were found to have rigged the bidding process in 27 oil pipeline projects in 2009 and again in 2011.

Affected firms include Kumho Industrial, Daehan Oil Pipeline Corporation, Doosan Heavy Industries and Construction, Samsung Construction and Trade, Daewoo Engineering and Construction (E&C), Ssangyong E&C, SK E&C, GS E&C, POSCO Engineering, Hanwha E&C, Hyundai E&C and Hyundai Heavy Industries.

“The companies were found to have colluded with each other to coordinate which company would win a particular project,” the regulator said in a statement. “The companies have been ordered to refrain from such activities in the future.”

Hyundai E&C was slapped with the biggest fine of 36.2 billion won, followed by Hanyang Construction and Samsung C&T.

Keangnam Enterprise, Dong Ah Construction Industrial and Ssangyong E&C were exempt from punishment because of their poor financial health.

The FTC said Hyundai E&C, SK E&C and Daewoo E&C were found to have rigged bids for a 61.1-kilometer rail system linking Suseo in southeastern Seoul with Pyeongtaek, Gyeonggi Province. The companies were fined an additional 8.08 billion won.

The regulator said the companies rigged the bidding to keep prices at set levels for the railway line that will open later this year. It claimed that the collusion caused the government to pay more for the work.

The regulator said this move was the latest in a series of efforts to root out long-entrenched bid rigging in the construction sector.

“We will work harder to prevent illegal business activities that compromise free and fair competition,” an FTC official said.