The antitrust watchdog is likely to slap 13 Korean builders with combined fines of 500 billion won ($430 million) for collusion, industry sources close to the matter said Thursday.
The sources said the construction companies, which include Hyundai E&C, Daewoo E&C and Daelim E&C are suspected of fixing prices for the liquefied natural gas tank project, which started in 2005. The project valued at around 1.3 trillion won was ordered by the state-run Korea Gas Corp.
“We are making an investigation into the collusion issue and the amount of the fine -- if they are found guilty -- will be confirmed in June at the latest,” said Choi Yong-keun, the Fair Trade Commission’s cartel policy division’s chief, told The Korea Herald by phone.
If the builders are fined, the amount will be the highest of its kind imposed on constructors here. The highest penalty so far was 435 billion won that was imposed on 28 builders in 2014 for fixing prices for the Honam railway project.
The involved builders mostly admitted their wrongdoing.
“Back in the 2000s, there was an atmosphere that such collusions were overlooked because construction was used (by the government) as a tool to boost the economy,” said an executive of a large builder, who declined to be identified.
Lim Chung-woo, a manager at the Construction Association of Korea’s contract policy division, said “Because the builder had to pay for design costs to bid for each section -- regardless of winning the bid -- they colluded to divide sections themselves to avoid the cost rising.”
By Shin Ji-hye (shinjh@heraldcorp.com)