A near €10 million compensation bill a CRH subsidiary is due from a Finnish town will hit education, childcare and other services, its council claims.
A Helsinki court recently ordered the town of Karkkila to pay CRH subsidiary Rudus €9.5 million following a dispute over a quarrying permit.
The compensation amounts to half the town’s tax income in a year, according to the council, which paid Rudus the money immediately after the court’s ruling.
Paula Salapuro, chairwoman of the education and culture board, predicted that the council faced “radical and rapid” decisions on schools and crèches as a result.
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“More or less everything that is not legally mandatory will have to be discontinued,” she said. “Optional subjects have already been cut from our secondary school, and more courses will probably be removed from our senior cycle curriculum.”
Karkkila is in southern Finland and has a population of just over 8,000 people. Its council’s income was €19 million in 2024.
Sources close to CRH maintain that Rudus offered Karkkila council opportunities to settle the dispute without litigation, avoiding damages and legal costs.
The dispute arose over the refusal of Karkkila council’s environmental committee to grant Rudus a permit to extract gravel from an area over which it had a 30-year contract dating back to 1987.
The agreement allowed the business to extract around one million cubic metres of material, but it had only drawn 20,000.
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Rudus had paid the total value of the contract upfront when it first agreed the deal with Karkkila – a condition the council sought. It then had to reapply every 10 years to renew the permit.
A local court dismissed the company’s challenge, but a court of appeal in Finnish capital, Helsinki, ruled that Karkkila was in breach of contract. The town argued that the first permit issued in 1987 covered its contractual obligations, which the court overruled.
Similarly the court found against the argument that Rudus sought access to a much wider area than that covered by the original licence.
Sources say the company believes it had no choice but to vindicate its contractual rights.
Karkkila has conceded that Rudus was acting legitimately and to protect its interests, and that the case can go no further. However, councillors say that its behaviour is contrary to corporate responsibility statements that claim CRH aims to be a good neighbour.
They highlight its most recent statement, which says: “Being a responsible company means developing trusting relationships and creating a long-term positive impact in the communities in which we operate.”
Council figures suggest that Rudus intended the case to set a precedent for other local authorities with which it has similar deals. Rudus is one of Finland’s oldest building materials businesses. CRH is one of the world’s biggest companies in its industry.
