Unraveling the Deceptive Road Construction Cartels: Saxony-Anhalt's Solidarity to Pursue Reparations
Post Cartel Fine: Nation Assesses Compensation Claims - State investigates compensation claims following cartel's activities
In the wake of a hefty fine slapped by the Federal Cartel Office against multiple road construction firms for noxious cartel agreements, Saxony-Anhalt and other adjacent states are scrutinizing potential reparations claims. The state transit authority is currently sifting through the agreements tied to these shifty companies, as per the infrastructure ministry's statement. Subsequently, it will be evaluated whether the possibility of reparations is on the table, a spokesperson confirmed. The damage discussion is also on the agenda for a meeting between the federal and state governments at the tail-end of May.
The Federal Cartel Office pulled no punches on Tuesday, disclosing that seven road construction firms from around Germany were wrapped up in cartel agreements for years while bidding for public sector tenders. Amongst them was a firm hailing from Landsberg in the Saalekreis. These backroom deals transpired from 2016 to 2019, primarily impacting tenders in Saxony, Saxony-Anhalt, Thuringia, Brandenburg, and Mecklenburg-Vorpommern.
Collusive practices in a multitude of tenders
The companies had been stashing public tenders for road maintenance and repair contracts between them for an extended period, according to the president of the Federal Cartel Office, Andreas Mundt. "Illicit cartel agreements can generate substantial damages for public authorities, which ultimately falls on the shoulders of citizens." The clandestine activities brought havoc to numerous tenders and contracts of public bodies like municipalities and state transit authorities. This included fundamental road repairs like resurfacing, as well as straightforward patching work.
The Federal Cartel Office has now slapped fines totaling €10.5 million. But the affected municipalities and authorities can also throw legal punches at the construction companies themselves, such as Altmarkkreis Salzwedel, which is scoping out legal recourse. At this moment, no reparation claims have been lodged against a company involved in the cartel agreement.
Behind the Scenes:
- These clandestine cartels in the road construction sector have ended up inflicting exorbitant public contract costs on states like Saxony-Anhalt.
- Seven construction firms received fines equaling €10.5 million for their participation in bid rigging and contract allocation activities.
- Companies, such as AS Asphaltstraßensanierung GmbH and Bitunova GmbH, were involved in these dubious agreements, attempting to avoid competition in various German territories.
- Investigations and raids were conducted by the Bundeskartellamt in collaboration with the Düsseldorf Public Prosecution Office and the North Rhine-Westphalia Criminal Police, and fines were based on the severity of the misconduct.
- Penalties for individuals implicated in these acts are being handled by public prosecution offices, indicating a broad enforcement approach that includes criminal proceedings against the culprits.
- Affected municipalities and states will likely push for reparations to recoup losses caused by these cartels.
- Dismantling such cartels strives to re-establish fair competition, economical public procurement, and enable affected public bodies to seek compensation for blown budgets during the cartel period.
- In response to the soaring costs of public contracting in states like Saxony-Anhalt due to clandestine cartels in the road construction sector, affected municipalities and states are contemplating reparation claims.
- The fines levied by the Federal Cartel Office on seven construction companies totaling €10.5 million were issued for their involvement in bid rigging and contract allocation activities, reminiscent of the practices of companies such as AS Asphaltstraßensanierung GmbH and Bitunova GmbH.
- As part of the broader enforcement approach, individuals implicated in these cartel agreements are also liable to face criminal charges, aiming to reinstate fair competition, efficient public procurement, and enable public bodies to pursue reparations for financial losses incurred during the cartel period.
