hankyoreh

The nation’s six large construction companies were discovered to have colluded in bidding on construction of the city’s planned extension of subway Line 7, following an investigation conducted by the governmental watchdog Fair Trade Commission.

The Fair Trade Commission (FTC) said on July 17 that it imposed a combined fine of over 22.1 billion won (US$24 million) on the six companies, Samsung Corp., Daewoo Engineering & Construction, Hyundai Engineering & Construction, GS Engineering & Construction, SK Engineering & Construction and Daelim Industrial, and demanded that the prosecution conduct a probe of these firms. Samsung was fined 4.58 billion won, followed by Daewoo’s 4.08 billion won and Hyundai’s 3.93 billion won. These six companies have dominated the bidding on railway and subway construction in the past .

According to the FTC, Seoul announced in December 2003 that it would construct an extension of the No. 7 line, between Onsu-dong in Bucheon and Cheongcheon-dong in Incheon, by dividing it into six sections at the cost of 1,245.6 billion won. After the announcement, the six companies agreed to take part in the bidding for each of the sections and all of them were successful with their bids. However, as disclosed by the FTC, one of the firms under investigation was discovered to have documents saying that a discussion about the bidding process was under way among the six companies.

The FTC launched its investigation on the companies’ alleged collusion because it had suspected the six companies of bidding on each section without overlapping one another’s bids. The commission created a system which can simulate the bidding process and has operated the system since January of last year. The system can analyze the probability of bidding-related collusion, using statistics from the governmental Public Procurement Service (PPC). This is the first case uncovered by the system, the FTC said.


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