Construction cartels await fate on R26bn of rigged projects

CONSTRUCTION cartels could learn their fate as early as June, the Construction Industry Development Board said yesterday.

Briefing Parliament’s public works committee, board chairman Bafana Ndendwa said he was updated by the Competition Commission last week on a probe into the major construction industry companies which had admitted being guilty of collusive practices.

“There are 21 companies that came in with disclosures, and they (the Competition Commission) are processing it.”

Ndendwa could not satisfy MPs’ calls for the companies to be named and shamed, as commission rules prohibited him from doing so until an order had been made against the firms.

According to a report tabled in the committee, the commission received 160 applications in terms of its Corporate Leniency Policy in November 2009.

The policy is used as a means to encourage cartels to disclose their involvement in collusion in return for immunity from prosecution. The commission would issue fines as a deterrent to future collusive behaviour.

More than 130 rigged projects worth about R26 billion were identified. They included construction of stadiums and roads. “From the settlement applications, the 21 firms also implicated an additional 22 firms that had not participated in the settlement process,” the commission said in the report.

It would probe those 22 firms. The settlement talks would be completed by mid-May, after which a consent agreement would be filed with the Competition Tribunal.

“The tribunal is likely to finalise the agreement in June/ July,” said Ndendwa.

Firms could be fined billions of rand. MPs expressed concern that fines, with no jail time, could send the wrong message.

“If people behave wrongfully, there must be consequences,” DA MP Anchen Dreyer said.

ANC MP Celiwe Madlopha compared the settlement to an incentive to firms that admit- ted anti-competitive conduct.

The board said guilty parties would not be exempt from action by other agencies or individuals, such as the Receiver of Revenue and the board itself.

The Hawks are conducting a parallel investigation. Affidavits leaked to the media showed evidence of collusion in major infrastructure projects, including Soccer City and Green Point Stadium. – Sapa