Seven major construction companies are under investigation for suspected bid rigging on contracts for the construction of natural gas pipelines ordered by the state-run Korea Gas Corp. (KOGAS), the Seoul Metropolitan Police Agency said Wednesday.
The seven firms are Daelim Building, Daewoo Engineering & Construction (E&C), Doosan Heavy Industries, GS E&C, Hanwha E&C, Samsung C&T and SK E&C. Three other construction companies are also being investigated.
The ten companies are suspected of having collected information about 29 pipelines construction projects, together worth 2.1 trillion won ($2.06 billion), and rigged the bidding, causing damage of 292 billion won to KOGAS.
KOGAS awarded 29 projects for different zones of the liquefied natural gas-carrying pipeline between May 2009 and September 2012. The KOGAS's pipeline carries gas to major cities, from which regional businesses distribute to individual households.
The police suspects a total of 22 companies, including the seven major constructors, met a few times and decided which zones they would bid for by lots.
The police haven't investigated the other 12 firms or if KOGAS was aware of the alleged collusion.
The construction industry has been hit hard by fines imposed for collusion.
According to Yonhap News, the total amount of fines imposed on large constructors in the last two years for bid riggings surpassed 450 billion won with one company slapped with a penalty of nearly 60 billion won.
Yonhap said that 46 of Korea's 100 largest construction firms were punished by the Fair Trade Commission for bid riggings in the last two years.
They were involved in major projects including the construction of subways in Incheon, Daegu, and Busan, and the Four Major Rivers Project. It pointed out that many which involved collusions were state projects awarded under the Lee Myung-bak administration.