Parliament probe into 'lift cartel' HOLYROOD: CASH ROW

0 Comments | Sunday Herald, The, Aug 19, 2007 | by Paul Hutcheon Scottish Political Editor

IT has been marred by problems with the design, location and even the roof, but the Holyrood building is facing another headache: this time over its lifts.

Parliament officials have confirmed they gave GBP1.5 million in elevator contracts to a company which has been fined for its part in a price-fixing scandal. Holyrood bosses are now investigating whether Otis, which admitted being part of the "lift cartel", overcharged the taxpayer as part of its illegal practices.

A Scottish parliament spokesman said officials would study the contract and added: "The fine imposed by the European Commission relates to cartels in mainland Europe. The maintenance contract was awarded in line with the parliament's strict procurement guidance. Our procurement staff will be checking the contract in detail."

The cash row follows the European Commission's decision earlier this year to fine four companies nearly one billion euros for their role in carving up elevator contracts across Europe.

It was found that lift manufacturers ThyssenKrupp, Kone, Schindler and Otis fixed prices, rigged bids and shared contracts across Europe between 1995 and 2004.

One of the rigged bids included the European Commission's own lift contract for its headquarters in Brussels, as well as the Court of Justice in Luxembourg.

It has now emerged that Otis, owned by US-based United Technologies, was the company that installed the elevators in the Scottish parliament. Holyrood accounts show the company received GBP1.3m of public money for the installation, testing and certification of 13 lifts.

Only two companies, Otis and Schindler, submitted bids during the final stage of the procurement process for the contract, both of which were part of the same cartel. The contract was signed in 2000, a period in which the illegal activity was found to have taken place.

Budget documents also reveal Otis received GBP35,799 for lift maintenance services in 2005, followed by another four-year contract worth GBP121,000.