Eskom tender: firms to be prosecuted for price-fixing
THE AGRICULTURAL sector has called for the government to intervene to keep farms in the Western Cape operational and workers in their jobs. This comes as the City of Cape Town announced on Monday that Day Zero had been pushed back from April to mid-May due to a decline in water use by the agricultural sector.
However, deputy mayor Ian Neilson said there had not been any significant decline in water use by urban dwellers and called on residents to use no more than 50 litres per person per day in order to help “stretch our dwindling supplies”.
The agriculture industry, which helped the South African economy climb out of a technical recession last year, has been hit hardest by the drought.
Western Cape farmers have reportedly recorded R14 billion in losses so far.
Farmers have warned of a jobs bloodbath, saying as many as 50 000 people could be out of work soon if nothing was done.
By yesterday dams in the Western Cape were on average 25.3% full, according to figures from the City of Cape Town and the Department of Water and Sanitation.
AgriSA deputy executive director Christo van der Rheede said agriculture was making “very big sacrifices”.
“We are happy that in some regions agriculture operations have been scaled down dramatically to make sure that people do get water. We don’t want people, at the end of the day, to suffer as a result of the drought. We want to save lives,” he said.
However, Van der Rheede said they were concerned about the drought’s negative economic impact. “It’s going to lead to reduced agricultural production and job losses. We need government intervention to help farmers and keep agricultural operations going and workers on the farms.”
TAU-SA general manager Bennie van Zyl commended the agriculture sector for cutting down on water usage but warned there was a price to pay.
“Something that people should realise is that if farmers cut down on agricultural production, the price of fruit and vegetables will go up. That is a big problem, but we’ve got no choice but to make this contribution, because drinking water for people is more important,” said Van Zyl.
Meanwhile, Tony Marchesini, the founder and chief executive of Cape Townbased water purification company H20 International, said his company suspended its water refill service when the City’s Level 6b restrictions, which limited water usage to 50 litres per person per day, kicked in. FOUR companies have been referred to the Competition Tribunal for prosecution for price-fixing and tender collusion on a March 2015 Eskom tender worth R4.5 billion, despite the power utility withdrawing its complaint to the Competition Commission.
In a separate case, the commission yesterday confirmed it had reached a settlement agreement with Plasser SA in terms of which the provider of railway lines track construction and maintenance services in South Africa agreed to pay an R8.4 million fine.
Sipho Ngwema, head of communications at the commission, said yesterday the Eskom tender was for the supply, installation and dismantling of scaffolding and thermal insulation for all of the utility’s 15 coal-fired power stations.
Ngwema said the commission’s probe discovered evidence of price-fixing and collusive tendering by Waco Africa, acting through its SGB Cape division, Tedoc Industries, Mtsweni Corrosion Control and Superfecta Trading 159, and three joint ventures which SGB Cape formed with each of these companies through bilateral agreements.
He said the investigation found that SGB Cape concluded bilateral agreements with each of Tedoc Industries, Mtsweni Corrosion Control and Superfecta Trading to form three separate joint ventures to be used to tender collusively; SGB Cape submitted bids on its behalf and on behalf of the three joint ventures; and SGB Cape priced the bids in such a way that it manipulated the prices quoted by itself and the respective joint ventures.
The commission said 31 suppliers had responded to the tender, which was to retain or substitute SGB Cape as the provider of these services, when it closed in April 2015.
It received a complaint from Eskom in March 2016 alleging that SGB Cape and the three joint ventures may have colluded when bidding for the tender.
The commission said Eskom withdrew its complaint in March last year but the commission decided to continue with its investigation of the withdrawn complaint in terms of commission rules.
Commenting on the Plasser SA case, Ngwema said the company had admitted to colluding with Lennings DEC Rail Service, a division of listed construction and engineering company Aveng, on tenders for railway construction and maintenance issued by Transnet between 1997 and 2013.
Ngwema said in terms of the collusive arrangement, Lennings and Plasser agreed to allocate railway construction and maintenance tenders among themselves. The commission initiated a probe against the two in February 2014.