NMa Imposes Fines on Construction Companies in the Infrastructure and Civil Engineering Sector

NMa Imposes Fines on Construction Companies in the Infrastructure and Civil Engineering Sector. The Netherlands Competition Authority (NMa) has fined 345 construction companies an amount exceeding EUR 100 million. The majority of these companies received the decisions imposing fines last week and the remainder will do so in the short term. All the companies which have now been fined participated in the accelerated sanctions procedure. The special procedure created for this purpose has met its aim due to the large number of companies which participated in the procedure and the deadline for completion of the procedure,. The list of companies in the infrastructure and civil engineering sector and the fines imposed will be published in the Netherlands Government Gazette.

In October 2004 NMa drew up a report on the companies due to their participation in a cartel structure within the infrastructure and civil engineering sector in the period from 1998 up to and including 2001. In addition, a number of companies were also fined because they had entered into agreements to divide the market in relation to a number of large infrastructure projects, such as the southern high-speed rail link, HSL-Zuid.

In order to arrive at the decisions imposing fines, NMa applied an accelerated sanctions procedure to enable the companies to 'come clean'. This procedure meant that the companies were not heard individually, but presented their opinions on the reports collectively through their representative, Mr J.C. Blankert. NMa reduced the fines of companies which participated in the accelerated sanctions procedure by 15%. NMa took these decisions imposing fines within five months. Given the large number of companies involved, this procedure would possibly have taken years if NMa had followed the regular procedure.

Thirty-four companies did not participate in the accelerated procedure. The sanctions procedure against these companies has now started.

The fines imposed vary from EUR 1,363 to EUR 18,842,290 per company. The total amount of the fines is lower than was originally estimated. It is not the case that individual fines were lower than expected, that the total amount of the fines imposed in the accelerated procedure ultimately exceed EUR 100 million, while at the end of January an amount of EUR 135 million was assumed.

In 2001 approximately 20 companies showed during the procedure that they had not had any turnover from tenders in the infrastructure and civil engineering sector. A minimum fine of EUR 4,000 was set for these companies. The fines of 111 companies were reduced by the 15% reduction in the fine for SME companies. Seven foreign companies were fined.
The companies have to pay the fines imposed. NMa received applications from 121 companies for a reduction of the fine imposed due to imminent payment problems. NMa has offered 75 companies the possibility of paying the fine in instalments since it appeared that immediate settlement of the fine could result in a delay in payments. Of these fines, EUR 63 million has already been paid or promised. The fines collected by NMa will be transferred to the Treasury.

With regard to the remaining investigations in the construction sector, NMa will announce the results of its investigation into the installation sector at the end of April. The investigation into the construction and utility sector will be completed in the summer. In addition, investigations are being held in sectors other than construction. The results of these investigations are also expected in the coming months.