Balfour Beatty has suspended three employees on a major National Grid contract in the West Midlands while it carries out an investigation into “allegations of improper conduct”.
The GMB union had written to National Grid about what it says are allegations of “bullying, mis-reporting, fraud and corruption” on a Gas Distribution Strategic Partnership covering gas mains replacement work in the West Midlands.
Balfour Beatty won two eight-year contracts under the Gas Distribution Strategic Partnership to cover the North-west and West Midlands in December 2012. The combined deals were worth £1.2bn.
In his letter to National Grid, GMB national secretary Gary Smith said: “We understand that gas mains replacement work, running into tens of millions of pounds in value, may have been tainted by allegations of corrupt practice.”
A Balfour Beatty spokeswoman confirmed that the contractor has been leading an investigation into allegations of improper conduct on its West Midlands gas mains replacement contract.
She said three “middle managers” have been suspended while the investigation continues.
“There has been no suggestion or evidence of bribery, corruption or any other impropriety in the award of the contract to Balfour Beatty in April 2013,” she said.
“Following the award of this contract, Balfour Beatty and National Grid put in place controls to prevent inaccurate reporting of work done under the contract.
“We have found these controls to have been effective and there has been no inaccurate reporting to National Grid or the regulator.
“This investigation is focused on localised behaviour by a small group of individuals working for Balfour Beatty involved with subcontracting in the West Midlands contract.”
Balfour Beatty has a long-term relationship with National Grid, which included winning a place on its £250m framework for overhead lines announced in March.
A National Grid spokeswoman said: “National Grid requires the highest standard of ethical conduct from all those working on our behalf.
“We are aware that our contractor Balfour Beatty is investigating allegations of improper conduct associated with the contract for our gas mains replacement activity in the West Midlands, and that they have suspended three of their employees while the investigation is ongoing.
“We are keeping in close touch with Balfour Beatty on their investigation, but it would not be appropriate to comment further until the investigation is concluded.”
This week, Balfour Beatty announced a £30m profit warning and that its group chief executive Andrew McNaughton had resigned.