Carinthia secures 12 million euros from construction cartel

Carinthia will receive 12 million euros from companies involved in a construction cartel, Deputy Governor Martin Gruber said on Tuesday, according to ORF. He described the repayment as a first step.

The money was secured through negotiations between the state road construction department and the Association of Industrial Construction Companies in Austria, which represents the construction firms involved. From 2002 to 2017, the companies had harmed public authorities by artificially inflating prices through agreements before contracts were awarded.

At least ten road and bridge contracts in Carinthia were affected. Experts calculated the 12 million euro sum after rulings by the Cartel Court.

Some 7.5 million euros will be spent on construction projects this year, Gruber said. These are projects that would otherwise have been postponed until the coming years for budgetary reasons. The remaining funds will be used next year.

Further payments could follow, Gruber said. Several cases are still pending, and additional negotiations would be required after rulings. All larger construction companies in Carinthia had been involved in the cartel, meaning the state would still have to award contracts to them.

Gruber said he saw a “self-cleaning process” among the companies, pointing to the precision of their tenders and bids.

Günther Vallant, president of the Austrian Association of Municipalities, told ORF that the association had commissioned a litigation funder through the Federal Procurement Agency. The aim was to remove the risk for Carinthian cities and municipalities while damages were assessed and claims pursued.

It was not yet clear how many municipalities had taken up the offer, Vallant said, because the process was still under way. Each city and municipality could also reach a settlement with the relevant construction company or file a lawsuit independently.

Vallant said the damage was substantial. Municipalities were obliged to assess and recover any losses, he said, warning that failing to do so could constitute abuse of office.