Building firms fined for price-fixing

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State competition authorities have hit two large construction firms with heavy fines after some employees were found to have set prices on road-building projects. One of the firms, though, may avoid paying its fine.

The case stems back to 2005, when employees of Veidekke and rival firm NCC started cooperating on the price of asphalt for road-building projects in Trøndelag and Møre og Romsdal. Veidekke officials blew the whistle themselves, after one of the employees demanded an extraordinary payment and threatened to go to the authorities with information on alleged irregularities within the company if he didn’t receive it.

Veidekke asked the competition authorities (Konkurransetilsynet) to investigate and fired the employee, Odin Kringen, who then took his story to Norwegian Broadcasting (NRK). Kringen has claimed all along that top management at Veidekke knew about illegal cooperation with NCC Roads, a charge Veidekke officials deny.

“With the exception of a single case, there is one person who is responsible for the illegalities that have been exposed,” Veidekke chief executive Terje R Venold wrote in a press release after the fines were levied. “We are disappointed that this could happen despite considerable resources being put into comprehensive training within the areas of ethics and correct business procedures.”

Veidekke was hit with a fine of NOK 270 million (around USD 48 million) and NCC with NOK 165 million. Veidekke may be excused, however, since it took the case to the authorities itself. NCC is protesting the size of its fine and has six weeks to formally respond.

NCC denies it was involved in illegal price-fixing for asphalt in the county of Møre og Romsdal. NCC Roads accepts the charges of illegal cooperation with Veidekke regarding prices for road projects in Trøndelag, but claims the fine is much too high.

“NCC’s internal investigation confirms irregularities in this area,” NCC wrote in a press statement. It blamed the irregularities on a single, former employee “who consciously acted in violation of NCC’s values and ethical guidelines.”

Views and News from Norway/Nina Berglund