Huge construction “cartel” threatened with millions in fines

The Swiss Competition Commission (COMCO) has uncovered evidence of a massive construction price fixing scam that allegedly swindled municipal projects by over-charging for work, the NZZ am Sonntag newspaper reports.

The cartel is believed to have consisted of hundreds of companies of all sizes and has implicated local politicians in canton Graubünden in southeastern Switzerland. The area is a favourite haunt for tourists, some of whom have holiday homes in the region.

Projects to renovate a rail tunnel and build an extension to a hospital may have been over-charged 20%, according to reports. COMCO has been investigating the alleged scam since 2012and is set to issue its final verdict in a few weeks.

“The investigation into price fixing in canton Graubünden is one of the largest we have worked on,” COMCO vice-director Frank Stüssi told the newspaper. It is thought that construction companies met up to discuss lists of projects that would be shared out for inflated prices.

A whistleblower went to COMCO because he felt his complaints were not being taken seriously by the local authorities.

A guilty verdict brings the possibility of fines totaling millions of francs, which could threaten the existence of some smaller companies, according to industry experts.