Re­movals car­tel bust

Rep­re­sen­ta­tive blows lid on cover pric­ing in fur­ni­ture sec­tor

The Star Early Edition - - NEWS - Roy Cokayne

A REP­RE­SEN­TA­TIVE of one of the six fur­ni­ture re­movals firms ap­pear­ing be­fore the Com­pe­ti­tion Tri­bunal yes­ter­day about set­tle­ment agree­ments the busi­nesses had en­tered into for col­lu­sion of­fences re­ported that he had been ap­proached “by a fool” last week want­ing a cover quote.

Peter Braute­seth from Joel Trans­port said he had been in­volved in the in­dus­try for 25 years and cover ten­der­ing in the re­movals in­dus­try was “sort of a nor­mal prac­tice”.

Cover pric­ing in­volves cre­at­ing the il­lu­sion of com­pe­ti­tion by get­ting some firms to sub­mit non-com­pet­i­tive bids to en­able a fel­low car­tel mem­ber to win a ten­der.

The tri­bunal was hear­ing set­tle­ment agree­ments re­lated to col­lu­sion by Matthee Fur­ni­ture Re­movals; De Wet Hu­man Trans­port, trad­ing as Vik­ing Trans­port; Su­per­doc Thir­teen, trad­ing as Low Line Fur­ni­ture Re­movals; Trans­freight In­ter­na­tional; JH Retief Trans­port; and Joel Trans­port.

This fol­lows the tri­bunal last month con­firm­ing set­tle­ment agree­ments en­tered into by Cape Ex­press and Propack Re­movals.

Cape Ex­press agreed to pay a fine of R645 710 while Propack Re­movals paid R454 127.60.

This fol­lowed a com­mis­sion in­ves­ti­ga­tion into 69 com­pa­nies of­fer­ing fur­ni­ture re­moval ser­vices for col­lud­ing on ten­ders is­sued by var­i­ous gov­ern­ment de­part­ments, in­clud­ing the SA Na­tional De­fence Force and SA Po­lice Ser­vice plus ten­ders is­sued by large cor­po­rates such as Eskom and PPC.

It re­vealed more than 3 500 re­lo­ca­tions ten­ders were sub­jected to col­lu­sion by the 69 com­pa­nies be­tween 2007 and 2012. The com­mis­sion in­ves­ti­ga­tion es­tab­lished that:

Matthee Fur­ni­ture Re­movals was in­volved in 192 in­ci­dents of col­lu­sion and re­com- mended a fine of R159 205.

Vik­ing Trans­port was in­volved in 24 in­stances of cover pric­ing and rec­om­mended a fine of R188 064.48.

Low Line Fur­ni­ture Re­movals was in­volved in 113 cases of cover pric­ing and rec­om­mended a fine of R249 616.

Trans­freight In­ter­na­tional was in­volved in 59 in­stances of cover pric­ing and rec­om­mended a fine of R607 492.27.

JH Retief Trans­port was in­volved in 3 487 in­stances of cover pric­ing and rec­om­mended a fine of R4 273 060.80.

Joel Trans­port was in­volved in 12 in­stances of cover pric­ing and rec­om­mended a fine of R150 582.45.

An­thony Ndz­a­bandz­aba, who has headed the com­mis­sion’s in­ves­ti­ga­tion, said yes­ter­day they had not been able to es­tab­lish which com­pa­nies had been the in­sti­ga­tors or ring lead­ers of the car­tel.

Ndz­a­bandz­aba said that the of­fices of JH Retief Trans­port in Pre­to­ria and Cape Town had been raided by the com­mis­sion, which helped to ex­plain the high num­ber of cases in­volv­ing that company.

JH Retief told the tri­bunal they were able to iden­tify ten­ders that in­volved cover quotes be­cause they drew a cir­cle at the cor­ner of the page but there was not any business rea­son for do­ing this and de­nied was to iden­tify a company they owed a favour.

Braute­seth said the client would have to con­sent to com­pa­nies do­ing cover quotes.

“Not any­body can quote on this work. Who­ever does this has to so­licit it and make sure all his cover quote com­pa­nies names are on the doc­u­men­ta­tion. So the ground­work is done right at the be­gin­ning.

“I had some fool ask me last week to cover quote him. Our company does not ac­tively so­licit cover quot­ing and we have been beaten with a big stick.”

The tri­bunal by late yes­ter­day con­firmed the six set­tle­ment agree­ments.

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