Tribunal hears cover price mystery
MYSTERY surrounds an alleged cover price submitted by contractor Giuricich Coast Projects for the Mondi Reel Handling project, the Competition Tribunal has heard.
The case involves alleged cover pricing in 2008 between Giuricich and Grinaker, a wholly-owned subsidiary of listed Aveng, for the project.
Tsakane Marolen, counsel for Giuricich, told the tribunal on Friday. Giuricich denied any knowledge of the price it was alleged to have submitted for the project and none of the Competition Commission’s witnesses could explain how “that price came to be”, who submitted it, when it was submitted and how it was submitted. Marolen was giving closing arguments to the tribunal in the case.
The project was a turnkey project for the design and construction of a 2 000m² truck loading building, floor upgrades for automated vehicle use and civil works necessary for the installation of reel handling conveyors.
The commission alleges Giuricich and Grinaker engaged in cover pricing in 2008. A cover price is a price obtained by a firm from competing firm to ensure they were not awarded a contract to prevent them from being removed from the client’s tender list or to anti competitively co-ordinate the allocation of projects.
Grinaker was the corporate leniency applicant in the Mondi case and was awarded conditional immunity from prosecution for the project in March 2014.
Mondi’s documents related to the project were destroyed during a fire in 2013. Giuricich chief executive Rodney van der Walt, who was managing director of the firm at the time of the alleged contravention, and managing director Vernon van Wyk, who then was Giuricich’s procurement director, estimator and senior quantity surveyor, both denied the allegations at hearings previously held by the tribunal.
The price Giuricich Coastal Projects allegedly submitted for the project was R33.455 million while Grinaker’s price was R32.62 million.
The case hinges on a telephone call that took place in February 2008 between Van der Walt and Alastair McNair, who at the time of the project was Grinaker’s proposals manager.
Giuricich denies that it sought and received a cover price from Grinaker.
The commission claims that during this conversation Van der Walt sought a cover price from McNair.
Morolen said the only witness called by the commission who could confirm that the price attributed to Giuricich on a specific form was the cover price was Alistair McNair, who at the time of the project was Grinaker’s proposal manager.
But Morolen stressed McNair said he did not communicate the cover price to Giuricich, he did not know who on behalf of Grinaker did so and when this was done.
“The commission did not present any evidence that proves on a balance of probabilities that Giuricich sought and received a cover price from Grinaker. We submit that failure by the commission to adequately to prove the above questions spell the end of their case against Giuricich,” he said.
Judgment in the case was reserved.