Tri­bunal hears cover price mys­tery

The Star Early Edition - - BUSINESS REPORT - Roy Cokayne

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.

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