Finnish asphalt cartel ordered to pay damages

28 November 2013

Finnish contractor Lemminkäinen has been ordered to pay €48 million in damages, interest and legal expenses by the District Court of Helsinki to reimburse local authorities after being found guilty of acting as part of an asphalt cartel.

Six other defendants have been ordered to pay damages - VLT Trading, NCC Roads, Skanska Asfaltti, SA-Capital, Rudus Asfaltti and Super Asfaltti - up to the low single digit millions.

Lemminkäinen’s was the largest, split into damages of €26 million and interest and legal expenses of approximately €22 million.

The company expects to make a loss in 2013 as a result. However, the damages of €123 million that were originally sought from Lemminkäinen were lowered after claims by the Finnish Transport Agency were rejected by the court.

The government had sought damages of €56.7 million, but the claim was dismissed due to evidence that it benefitted from the cartel.

Court documents say that the National Board of Public Roads (NBPR) and the Finnish Road Enterprise (FRE) participated in a cartel concerning work commissioned by the State from at least 1998.

The documents say that representatives of the BNPR were aware of the existence of the cartel from as early as in 1994.

The BNPR was responsible for maintaining Finland’s public roads and commissioning new work, while the FRE was responsible for construction. This structure was changed with the creation of the Finnish Transport Agency at the start of 2010.

Government approval

“The District Court considers that no damage has been caused to the State on the basis of the activity which the State has approved at the time when it took place, which the State has participated in, and from which the State itself considers to have benefited from,” the ruling states.

Claims from three other municipalities were also rejected. The Finnish Transport Agency declined to comment.

A spokesman from Skanska said it was still in the process of analysing how much the damages ruling would affect it, but it did not expect it to impact the overall 2013 group result.

Lemminkäinen said the latest claims for damages were without foundation, while NCC also echoed this. All the contractors have 30 days to submit an appeal.

In 2009, Finland's Supreme Administrative Court handed down fines totalling €82.55 million to the seven contractors after finding them guilty of operating the nationwide asphalt cartel between 1994 and 2002.