South Korea’s biggest business association called for lifting heavy sanctions against major builders involved in fixing prices in bids for public construction projects.

The government’s policy to suspend the builders from participating in bidding, could paralyze upcoming national development projects and damage the reputation of local construction firms, the Federation of Korean Industries said on Tuesday.

“Political consideration is needed to remove the ban on firms from bidding for national projects by taking into account the difficult market conditions, overlapping and harsh sanctions,” senior FKI official Shin Seok-hoon said.

In South Korea, companies found to have manipulated prices or rigged the bidding process could be excluded from taking part in future public projects for up to two years and also be slapped with fines.

According to the FKI, some 60 local builders were suspended from the bidding process for public construction projects for up to 16 years on charges of collusion since 2012. Of them, 51 companies were among the country’s top 100 builders in terms of construction ability.

In the latest case, the country’s antitrust watchdog the Fair Trade Commission on Monday fined 16 builders a combined 30.4 billion won ($27.7 million) for colluding in the bidding process for a reclamation project in Saemangeum, North Jeolla Province, and sewage treatment project in South Chungcheong Province.

The builders include SK Engineering and Construction, Hanjin Heavy and Construction, Daewoo E&C, Kolon Global, Samsung C&T, Hyundai Development Co., and Hanwha E&C.

“The Fair Trade Commission will further strengthen our surveillance on bid rigging. We will sternly restrain (companies) based on principle and law,” an FTC official said.

In 2014, the number of cases of builders caught rigging bidding prices dramatically increased to 15 national development projects from just one the previous year.

One of the biggest bid rigging cases last year was the so-called four rivers project, with authorities slapping fines exceeding 111.5 billion won on Hyundai E&C, GS E&C and SK Engineering and Construction.

Faced with criticism that the stern measure may cause the builders to lose global contracts, the government announced in January that it would support the firms so that they did not face penalties during the bidding process for overseas projects.

The move came after a growing number of foreign builders spread false propaganda against the Korean firms, claiming the sanctions could disrupt other projects.

The Ministry of Land, Infrastructure and Transport said it would quickly respond if foreign companies and bodies that placed orders demanded explanations on bid rigging probes.

“Better communication between the construction industry and the government is needed to prevent local bid rigging problems to develop into obstacles for winning overseas projects,” a ministry official said.

By Park Han-na (hnpark@heraldcorp.com)