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Punished firms may be able to circumvent public procurement ban

SIX CONSTRUCTION firms that were fined Sk1.35 billion for cartel practices may be banned from participating in public procurement tenders for the next five years. However, market experts say that even if this Draconian step is taken, the firms may actually be able to get around the ban.

The companies Skanska DS, Inžinierske Stavby, Strabag, Doprastav, Betamont and Mota Engil were issued the fine by the Anti-Monopoly Bureau last year for operating as a cartel in a tender for the construction of a section of the D1 freeway in 2004. The Public Procurement Bureau then said they could be banned from further tenders for five years, and has launched administrative proceedings to see whether a ban is in order.

However, Public Procurement Bureau spokeswoman Helena Fialová confirmed that the ban would apply only to those six companies that were found to have acted illegally, not to other companies within their business groups. In other words, there would be nothing to prevent the same firms from continuing to build highways through daughter or affiliated companies.

Attorney Tomáš Kamenec said it was also questionable whether the Bureau even had the right to issue a ban.

The size of the fine and the prospective ban are unprecedented in Slovakia’s regulatory history.

After comparing 880 separate elements in the firms’ bids, the Anti-Monopoly Bureau ruled that they had come to an agreement on price before the tender in order to inflate the contract. The firms continue to deny the charge.

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