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Montreal infrastructure bidding questioned


October 16, 2009
By Andy Bateman

October 16, 2009 – An ongoing Radio-Canada investigation suggests that a
small number of construction firms are colluding to control bidding and keep
prices high on major municipal infrastructure projects in the greater Montreal region, with
taxpayers footing the higher costs.

The province, continues the report, 
has committed to spending billions of dollars on construction projects
over the next decade and several whistleblowers have come forward to say a
small group of contractors has cornered many of the contracts.

The report suggests taxpayers are paying up to 35 per cent too much.

Paul Sauvé, president of the Montreal
masonry firm LM Sauvé, said a small group of companies, dubbed by some the
Fabulous 14, obtained most of the infrastructure contracts in Montreal. The firms would essentially take
turns winning contracts, Sauve told Radio-Canada.

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Francois Beaudry, who was a consultant for Quebec's deputy minister of transport, said
he learned how the system worked thanks to the help of an informant. Beaudry
told Radio-Canada that in 2003, an anonymous contractor called to tell him the
results of calls for tender on 10 major projects in Laval — the day before they were to be awarded.”
There was collusion and a last-minute change on two of the 10 projects,"
said Beaudry.

Beaudry eventually began working as an intermediary between Quebec provincial police
and the informant.

A contractor who asked that his identity be kept confidential
corroborated Beaudry's version of events.

The bids were fixed using a code based on a fictitious golf game, the
contractor told Radio-Canada. One firm would organize a fake game of golf, and
tell the others that nine players would be leaving from the fourth hole at 11
o'clock, said the contractor. The
"fourth hole" was code for $4 million and "nine players"
would indicate $900,000, so that the winning bid would be $4.9 million and the
other companies involved would have to bid above that.

Radio-Canada has also learned that non-complying companies have endured
threats of physical violence and damage to equipment.

The federal Competition Bureau suggests collusion in the construction
industry can jack up prices 20 per cent and more.

The office of Quebec's
Public Security Minister Jacques Dupuis said the government would wait for the
results of police investigations before deciding whether further action is
needed.

But the opposition parties at the national assembly said it is time for
the government to launch a public inquiry. "It is urgent," said
interim Action Démocratique Leader Sylvie Roy. "We need a public inquiry
before the all the money that we want to invest in our infrastructure — $43
billion — is spent," Roy
said.