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Fines for bid rigging on eight construction companies

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Press release of the Hungarian Competition Authority

Fines for bid rigging on eight construction companies

The Competition Council of the Hungarian competition authority (GVH) imposed a fine of HUF 593,9 million (ca. EUR 2,4 million) on 8 construction companies for the rigging of their bids in respect of a road construction work put out to tender. The bids in the public procurement deal were invited by the Municipality of Budapest. The members of the cartel agreed which one of them was to win the public procurement contract and to employ then the others as subcontractors to the project.

On 16 September 2005, the Competition Council found that the practice of the following undertakings had the potential to restrict competition and, therefore, imposed fines on them.

Alterra Rt.

HUF

7 200 000

ca. EUR

29 000

Betonút Rt.

HUF

68 000 000

ca. EUR

274 000

EGÚT Rt.

HUF

74 700 000

ca. EUR

300 000

Hídépítő Rt.

HUF

182 500 000

ca. EUR

735 000

Mélyépítő Kft.

HUF

32 400 000

ca. EUR

130 000

Mota Rt.

HUF

29 500 000

ca. EUR

118 000

Strabag Rt.

HUF

182 600 000

ca. EUR

736 000

Swietelsky Kft.

HUF

17 000 000

ca. EUR

68 000

total

HUF

593 900 000

ca. EUR

2 400 000

No infringement was found to be committed by Hídtechnika Kft., Betonplasztika Kft. and Vegyépszer Rt., and the proceedings against them were terminated.

The fine calculation based on the total value of the public procurements published in 2001 and 2002, that is HUF 11,6 billion (ca. EUR 46,8 million).

The GVH started its investigation in 2001 and continued it during the year 2002. The investigation found that the anticompetitive practices covered all the 11 procurements in 2001 with two exceptions and one third of the 33 procurements in 2002.

The existence of a cartel agreement was evidenced by private records of board members of two undertakings of the cartel.

Bid rigging is one of the most serious and, therefore, most seriously punishable infringements according to the legal practice of the European Union, as it directly distorts the allocation of sources.

In calculating the amount of fine, in line with its previous resolutions, the Competition Council took into account the fact that the infringement concerned public money, hence it affected social interests to an increased extent.

Budapest, 16 September 2005

Further information:
Dr. Horváth Anita
press manager
Gazdasági Versenyhivatal
address: 1054 Budapest, V., Alkotmány u.5.
mail: 1245 Budapest, 5. Pf. 1036
tel: (+36-1) 472-8966
mobil: 30-970-8191
email:
http://www.gvh.hu