Municipalities seek damages from Austrian construction cartel

Years after the Austrian construction cartel was exposed, cities and municipalities are still pursuing compensation, ORF reported. In parts of Salzburg state, the potential claims amount to millions of euros.

The municipality of St Michael in the Lungau region estimates that contracts worth about five million euros could be affected, particularly road construction projects. Mayor Manfred Sampl, who also heads the Salzburg Association of Municipalities, suspects St Michael is not an isolated case.

“We have so far supported many municipalities in the state with organisational assistance, including training. We expect around half of the municipalities to report possible damages,” Sampl said.

The suspected cases have been submitted to LitFin, a Czech litigation funder. The company is bundling claims from cities and municipalities across Austria and seeking compensation from the companies involved in the cartel.

The city of Salzburg submitted around 250 construction projects for review more than a year ago. Thirty cases have now been selected for closer examination because of possible price-fixing agreements.

Mayor Bernhard Auinger said the city hoped to recover some of the potentially incurred losses. “We expect a very long procedure, and we also believe that we have good chances of recovering a great deal of money,” he said.

The amount of any claims remains unclear. Competition economists are currently assessing the project documents. Concrete compensation claims can be made only after that work is completed.

The state of Carinthia recently recovered 12 million euros, showing that substantial sums may be involved. Salzburg Governor Karoline Edtstadler said the state itself did not appear to have been harmed by the cartel. Its construction department had conducted several thorough reviews, and “according to everything we know so far, we are not affected,” she said.

Municipalities and authorities across Austria have faced extensive work in collecting documents for the investigations. LitFin is covering the legal costs as litigation funder, so the proceedings do not create an additional financial risk for taxpayers. If cases are won, part of the recovered money will go to the Czech company.