22 construction firm execs indicted for alleged rigging scheme
SEOUL, Sept. 24 (Yonhap) -- A total of 22 incumbent and former executives of 11 major local builders were indicted Tuesday on charges of collusion in the former Lee Myung-bak administration's highly controversial project to refurbish the country's four major rivers, state prosecutors said.
The construction firms allegedly colluded to clinch bids and committed various irregularities while participating in the mega-budget project, leading to unfair competition and wasting taxpayers' money, they said.
The 3.8 trillion won (US$3.5 billion) project, pushed by the former Lee government, was completed last year amid mounting criticism over its economic viability and negative environmental impact.
The Seoul Central District Prosecutors' Office said the builders include five major industry players -- Hyundai Construction & Engineering Co., GS Engineering & Construction Co., SK Engineering & Construction Co., Samsung C&T Corp., Daewoo Engineering & Construction Co.
The 22 executives, including the former Hyundai Construction chief and the former Daewoo Construction chief, allegedly orchestrated the rigging scheme in the turn-key construction contract, prosecutors said.
A turn-key contract is a type of agreement in which one successful bidder is responsible for the entire project from planning to actual construction. Such contracts, however, have sometimes been criticized for possibly creating leeway for collusion.
The firms are suspected of having reaped huge profits through price-fixing, prosecutor said.
"It is difficult to estimate the exact amount of (the unfair profits) as we do not know the bidding price through a fair competition," a prosecutor close to the investigation said.
The prosecution office said it will continue with a rigging probe involving other turn-key contracts and ongoing slush fund probe of the chief of Dohwa Engineering Co. Ltd., a major local civil engineering firm,
Kim Young-yoon is accused of siphoning off company funds worth nearly 46.3 billion won, prosecutors said. Dohwa had a meteoric rise and became the largest civil engineering company in the country on the back of the controversial project. The firm also landed many other government construction projects over the last five years.