Sanral sends mixed signals on bid rigging

12 companies to face civil damages charges

TWELVE construction companies, including joint ventures, are to face civil damages claims from the SA National Roads Agency (Sanral) for collusion and bid-rigging on the agency’s tenders, including the Gauteng Freeway Improvement Project (GFIP).

However, Sanral is giving mixed signals about its planned claims against them.

Sanral appears to have backtracked on claims made by Alice Matthews, the agency’s company secretary and risk officer, in an opinion piece published in Business Report last month that the process to calculate the damage to the public purse through independent legal experts and economists appointed by the agency had been concluded.

Contradiction

Sanral spokesman Vusi Mona refused to comment on the total quantum of the damages that the agency had suffered because of the collusion as “this is part of the legal process, which is still under way”.

Pressed for an explanation of the contradiction between the two statements, Mona said the matter was sub judice.

However, none of these claims is already before the courts or being considered by a judge.

Sanral confirmed it was considering legal action against the 12 companies, including joint ventures, which admitted to contravening the Competition Act in the settlement agreements they reached with the Competition Commission.

In the opinion article, Matthews said Sanral would now pursue the issue through legal processes.

Mona declined to elaborate on what legal processes Sanral was contemplating other than to state that “Sanral will make these decisions under advisement”.

He also indicated that the legal process to lodge claims against the implicated companies was still under way.

Sanral was asked to comment on suggestions in some quarters that it should have had an idea from its consultants and quantity surveyors about what each tender or project should have cost and, therefore, been aware of the collusion.

Mona stressed Sanral followed an open tender process in the appointment of all contractors for the GFIP construction works and the entire process was governed by Sanral’s tender rules, Public Finance Management Act supply chain management regulations and Construction Industry Development Board regulations.

“There was therefore no reason to be suspicious of the prices received. It must be noted that at the time the projects were put out on tender, there were many other construction projects in progress – all in preparation for the 2010 Fifa World Cup.

“Also, at the time, prices of materials such as steel were rapidly rising, thus affecting the construction price adjusting factor. The prices of materials were queried. An idea is no confirmation of overpricing,” he said.

Some of the construction companies implicated have privately claimed that the collusion did not inflate the price of the tenders or projects because there were other competitive bids for the same projects that were not tainted by collusion.

Constraints

In addition, they have pointed to the high volume of work that was available and had to be completed before the 2010 Fifa World Cup, resulting in construction industry capacity constraints, and claimed the collusion was aimed at allocating projects to ensure there was a valid tender process and the projects got completed rather than inflating the tender price or project cost.

Mona confirmed multiple bids were received for each of the GFIP construction packages as part of the open tender process but stressed these claims by the construction companies were not shared by Sanral.

“Collusion to fix prices is a corrupt practice. Corruption in any form is insidious and corrosive. It robs the poor and stunts growth.”

Corruption in any form is insidious and corrosive. It robs the poor and stunts growth.