Crossrail

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

Northern leaders warn Treasury against scrapping under-fire HS2

23/05/2019Northern leaders warn Treasury against scrapping under-fire HS2

Scrapping HS2 would be a “disaster” and would undermine Britain’s “national prosperity for decades to come,” more t... more >
Network Rail unveils new regional managing directors

23/05/2019Network Rail unveils new regional managing directors

Network Rail has announced five new regional managing directors as part of its “evolution” towards a more passenger-focused approach.... more >
£800m worth of rail haulage contracts awarded by Network Rail

22/05/2019£800m worth of rail haulage contracts awarded by Network Rail

Network Rail has awarded contracts for rail haulage and the operations of its engineering trains and seasonal treatment services for Control Peri... 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

Meeting clients, suppliers and stepping forward

23/05/2019Meeting clients, suppliers and stepping forward

The Midlands 30-year plan will deliver many economic benefits and will need a wide and diverse supply chain to deliver some of the key projects. We caught up with long running sponsors of TransCityRail, Bridgeway Consulting Limited, specialists in Site & Ground investigations, Geomatics and Infrastructure, to discuss why networking events ... more >
read more blog posts from 'the sleeper' >

comment

The railway franchising model is broken, and passengers are paying the price

13/05/2019The railway franchising model is broken, and passengers are paying the price

Meg Hillier, MP for Hackney South and Shoreditch and chair of the Public Accounts Committee (PAC), gives her view on the state of the UK’s ... more >
NSAR: Tackling the digital skills shortage

13/05/2019NSAR: Tackling the digital skills shortage

The National Skills Academy for Rail (NSAR) chief executive Neil Robertson returns to write for RTM, this time, to assess the digital skills shor... more >
Delivering cost-effective electrification

13/05/2019Delivering cost-effective electrification

David Clarke, technical director of the Railway Industry Association (RIA), sets out the findings of a new report on how rail electrification can... more >
5G: An opportunity to revolutionise on-train connectivity

13/05/20195G: An opportunity to revolutionise on-train connectivity

Simon Holmes, group head of digital (engineering) at FirstGroup, introduces us to the 5G solution being delivered for the rail sector.  ... 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 >