A number of water tank manufacturing and sales companies involved in collusion during the bidding for the supply of water tanks to major domestic construction firms have been caught.
On the 17th, the Fair Trade Commission announced it would issue corrective orders against a total of 38 businesses, including Seongji Construction and Sejin SMC, for violating the Fair Trade Act and impose a penalty surcharge of 20.74 billion won.
These companies engaged in bid rigging by determining the expected winning companies and bid prices in advance during the bidding process for water tank construction installed in private buildings such as apartments, officetels, and commercial buildings. It was revealed that they attempted to avoid declining revenues resulting from low-bid competition by manipulating prices, particularly by exploiting competitive bidding among subcontractors designated by the construction firm.
Before the bidding, a company designated as the so-called 'general affairs' unit facilitated collusion by transmitting bid prices and coordinating with runner companies via phone, fax, and messenger.
According to the Fair Trade Commission, the total sales volume secured through their collusion amounts to approximately 50.7 billion won, with HDC Hyundai Development Company, Hoban Construction, and GS Engineering and Construction identified as the main affected companies.
In particular, some construction firms were pointed out for creating a structure where only certain companies were designated as subcontractors, effectively mandating their participation in the bidding, allowing for repeated collusion.
A Fair Trade Commission official noted, 'This case marks the first instance of penalizing bid rigging for water tank supply construction that can impact the cost of apartment sales,' adding, 'We hope this will serve as a turning point in eradicating the chronic collusion practices of water tank companies that have persisted widely and for a long time across the nation, thereby restoring competition in the relevant bidding market.'