Awards, contracts & appointments

14.12.18

HS1 and Crossrail suppliers admit to running ‘illegal cartel’ for 7 years

Two UK rail suppliers to major projects such as HS1 and Crossrail have admitted to operating an illegal cartel for almost seven years with the goal of increasing prices and reducing competition in the drainage market.

The Competition and Markets Authority (CMA) provisionally found that the two companies – Derbyshire-based Stanton Bonna Concrete Ltd and Somerset-based CPM Group Ltd – broke competition law by holding regular secret meetings to set up and operate an illegal cartel.

According to the investigation, the goal of the meetings was to fix or coordinate prices and share out the market for certain pre-cast concrete drainage products in Great Britain, with the ultimate aim of hiking up prices and fending off competition. 

These products are currently used in several large infrastructure projects beyond just rail, such as water management and roads. Customers include engineering and construction firms, utilities providers, and local and central government.

Throughout the period of the alleged cartel activity, which started back in 2006, the two firms were leading players in the field, accounting for over half of the market. From 2010 onwards, they held over 90% of this market.

Stanton Bonna is a well-known railway supplier providing track and drainage solutions to the industry. Its sleepers have been installed on HS1, Nottingham Express Transit, Manchester Metrolink, Midland Metro, the DLR, and the Sheffield Supertram, for example, and its sister company SBC Rail currently supply concrete track solutions to Crossrail.

CPM Group, which is now owned by major supplier Marshalls, currently works on projects such as HS2 and Hinkley Point, although this was not the case while the cartel was taking place. As well as precast concrete drainage products, the company’s precast platform system, Stepsafe, is used to lengthen existing platforms or build new ones, while its Redi-Rock concrete walling is used to protect the rail line against erosion and landslips.

A third company, the Northern Irish FP McCann, is also under investigation by the CMA but has not made any admissions. The firm previously secured a contract with Balfour Beatty to supply precast modular platform units to Crossrail, and has worked with Morgan Sindall to provide a traction supply point for Crossrail as part of the London Power Tunnels programme.

Michael Grenfell, executive director of enforcement at the CMA, said that cartels can damage competition and lead to less customer choice, less innovation, and higher prices for customers.

“We’ve provisionally found that these three firms secretly shared out the market and colluded on prices for construction products used in many building projects across Great Britain,” he explained.

“The CMA does not tolerate such practices and will use our enforcement tools to crack down on those it believes are taking part in illegal cartels.”

As part of a settlement process, both Stanton Bonna and CPM admitted to participating in the alleged cartel and have agreed to pay fines, which will be determined at the end of the CMA probe. FP McCann is not part of this settlement, so at this stage no assumption can be made that it has definitely broken the law.

A spokesperson for CPM Group told RTM: “We accept the CMA’s ruling which follows our co-operation with it during its investigation. The ruling relates to events that occurred more than five years ago and involved CPM’s former directors while the firm was under their ownership. 

“In the years since the incident, CPM Group, under the guidance of new ownership and a new management team, has established robust and proactive processes to ensure compliance with competition law. The ruling will not impact on CPM’s current trading.”  

(Top image: Crossrail)

Comments

There are no comments. Why not be the first?

Add your comment

 

rail technology magazine tv

more videos >

latest rail news

Dawlish railway may be ‘moved out to sea’ to protect it from storms under new proposals

13/06/2019Dawlish railway may be ‘moved out to sea’ to protect it from storms under new proposals

The storm-battered Dawlish rail line could be “moved out to sea” and away from the “hazard” of the cliffs under new plans... more >
TfL awards contract for new DLR fleet to replace 30-year-old trains

12/06/2019TfL awards contract for new DLR fleet to replace 30-year-old trains

TfL has awarded a contract for 43 new trains to replace the oldest rolling stock on the Docklands Light Railway (DLR), with the first scheduled t... more >
Hitachi trains for Happy trains

10/06/2019Hitachi trains for Happy trains

ScotRail project manager Kirsty Devlin discusses the withdrawal of Class 365s, to be replaced with the brand-new Class 385 fleet. While Scot... more >

editor's comment

23/01/2018Out with the old...

Despite a few disappointing policy announcements, especially for the electrification aficionados amongst us, 2017 was, like Darren Caplan writes on page 20, a year generally marked by positive news for the rail industry. We polished off the iconic Ordsall Chord (p32), hit some solid milestones on Thameslink (p40), progressed on ambitious rolling stock orders (p16), and finally started moving forward on HS2 (p14) ‒ paving the way for a New Ye... read more >

last word

Encouraging youngsters to be safe on the railway

Encouraging youngsters to be safe on the railway

This summer, Arriva Group's CrossCountry and the Scout Association joined to launch a new partnership to promote rail safety among young people. Chris Leech MBE, business community manager at the... more > more last word articles >

'the sleepers' daily blog

Apprentice to Co-leading the Rail Sector Deal

05/06/2019Apprentice to Co-leading the Rail Sector Deal

In a series of Q&A’s with key speakers on the run up to TransCityRail Midlands, we caught up with TransCityRail panellist and Amey’s commercial account director, Anna Delvecchio, for her insight into what the Rail Sector Deal means for the rail industry and its supply chain. Anna started her career as an apprentice at the age o... more >
read more blog posts from 'the sleeper' >

comment

Hitachi trains for Happy trains

10/06/2019Hitachi trains for Happy trains

ScotRail project manager Kirsty Devlin discusses the withdrawal of Class 365s, to be replaced with the brand-new Class 385 fleet. While Scot... more >
Malcolm Holmes on new stations for the Black Country

10/06/2019Malcolm Holmes on new stations for the Black Country

Malcolm Holmes, executive director of the West Midlands Rail Executive, described the new stations set to be built for the Black Country region o... more >
The skills bottleneck: Dealing with growing apprenticeship demand

10/06/2019The skills bottleneck: Dealing with growing apprenticeship demand

Richard Turner, head of apprenticeships at Network Rail, details the reasons for growing apprenticeship demand in the rail sector over the coming... more >
A train journey on the Midland Main Line 15 years from now…

10/06/2019A train journey on the Midland Main Line 15 years from now…

Chris Hobson, director of policy and external affairs at the East Midlands Chamber, talks in detail about what travelling through the region will... more >

rail industry focus

View all News

interviews

Advancing the rail industry with management degree apprenticeships

08/05/2019Advancing the rail industry with management degree apprenticeships

In answering the pressing questions of how current and future generations of managers can provide solutions to high-profile infrastructure projec... more >