The Competition Commission has sent a five-page letter to about 30 construction companies as part of checks held on the sector. The letter has prompted reactions from the building companies, asking for very detailed information about their finances and their business strategy. "If we submit all these data, it is like handing over the keys to the business to our competitors" some of the construction companies say.
Not only is data requested for revenues, profit margins (on each project!) but also on contracts for research agreements, etc. The construction companies are also being asked their opinion about changes to the law on public procurement provided for in a bill prepared by the Ministry of Development.
In fact, the building contractors have been given just ten calendar days to respond to the letter with many considering it impossible to provide the necessary information in such a short period of time.
Apparently, letters were received not only by the companies belonging to the upper (seventh) class of contractors, but also by companies in the sixth class. Market watchers say that the construction industry is being targetted for the second time in a few years. And this is happening while most companies in the industry are struggling, with many showing losses in recent years, due to the multi-year crisis and delays in public works.
In addition, the Competition Commission has initiated the Article 11 procedure when both the Ministry of Infrastructure and the contractors' organizations protest against the huge discounts on public works. In other words, it seeks information about the competition when it appears from the bids submitted that the "save myself" logic prevails by offering discounts of 70% to 80% on certain tenders. The submitted draft law on public procurement also includes special provisions to limit incredibly high discounts being offered to clinch projects.
"At the same time, similar procedures have not been initiated for other sectors of the economy that show better economic results than construction, while in recent years there have been protests for price increases," say those who question the Competition Commission's priorities.
Law 3959/ 2011 stipulates that either at the request of the Minister of Development, or ex officio, the Competition Commission "examines a specific sector of the Greek economy" to determine the conditions of competition. If, in the context of the initiated procedure, it is first ascertained that there are no conditions of sound competition in the industry under investigation, the Competition Commission will make its views public, through a public consultation within 90 days from the initiation of this procedure.
"Adequate disclosure of opinions is ensured by a relevant summary announcement in at least two financial newspapers nationwide, as well as by full publication on the website of the Competition Commission. The public consultation lasts at least thirty days," the law stipulates.
After the end of the public consultation period, and if the Competition Commission finds competition conditions lacking, it announces specific measures which it considers to be necessary, appropriate and in accordance with the principle of proportionality, to improve conditions.
The Competition Commission shall adequately and appropriately make public its views on the measures it announces and put them up for public consultation. The new public consultation also lasts at least thirty 30 days. The Competition Commission, after the end of the consultation period and after taking into account its results, imposes its decision.