'Buyang Industry and Sinheung Humgwan' Colluded in Public Sector Concrete Pipe Bids... Fair Trade Commission Issues Corrective Orders and Imposes Fines

[Sejong=Asia Economy Reporter Joo Sang-don] Buyang Industry and Shinheung Humgwan, which colluded in public sector concrete pipe procurement bids, have been caught by the Fair Trade Commission and will face sanctions.

On the 21st, the Fair Trade Commission announced that it decided to impose corrective orders and a total fine of 313 million KRW on Buyang Industry and Shinheung Humgwan for colluding on the winning bidders and bid prices in 38 concrete pipe procurement bids conducted by the Public Procurement Service, Korea Electric Power Corporation, and local governments.

According to the Fair Trade Commission, Buyang Industry and Shinheung Humgwan agreed in advance on the winning bidders and bid prices in concrete pipe procurement bids from June 2012 to August 2016 and executed these agreements.

The two companies divided the delivery regions: Buyang Industry was to win bids in the northern Chungcheong Province area, and Shinheung Humgwan in the southern area. The designated winning bidder agreed to bid at 97-98% of the base amount, while the supporting companies bid at higher prices.

As a result of this collusion, out of the total 38 bids, Buyang Industry won 18 bids and Shinheung Humgwan won 20 bids with an average winning rate of 96%.

A Fair Trade Commission official stated, "By detecting and sanctioning long-term secret bid rigging in the public sector material procurement market, we expect to establish competitive order in future related bids and contribute to reducing national budget expenditures." He added, "The Fair Trade Commission will continue to closely monitor public bids to prevent collusion and will take strict measures through prompt investigations if any signs of collusion are found."

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