‘ Shameful collusion ’ in projects 2010

A HEARING into “shameful” collusion by construction companies that led to bid rigging and price fixing on 2010 World Cup projects opened on Wednesday, tarnishing the legacy of South Africa’s historic tournament praised as a glowing success.

A tribunal is being asked to confirm fines totaling R1.46-billion for 15 companies that conceded to “rigged” projects in the general construction industry between 2006 and 2011.

World Cup-related work is included in the findings by the Competition Commission, which uncovered the wrongdoing by the country’s biggest building firms in a two-year process in which the companies came forward and acknowledged their roles and the extent of price fixing in exchange for guarantees they wouldn’t face criminal prosecution.

There was “a shameful pattern of collusion” by the companies, David Unterhalter, a lawyer representing the commission said.

The collusion by the companies led to inflated prices on projects like the new R7.3billion Cape Town Stadium and a R2-billion contract to redevelop Soccer City stadium and the surrounding precinct in Johannesburg, the World Cup’s venue that hosted the opening game and the Spain-Netherlands final.

The findings chip away at the national pride and unity still felt by South Africa after it was widely praised for pulling off a successful World Cup despite initial doubts.

The South African Local Government Association says Cape Town, Johannesburg, Durban, Port Elizabeth and Polokwane could collectively be owed up to R3.9-billion because of the price fixing.

Lawyers representing Salga and the Gauteng government, which controls SA’s commercial hub, Johannesburg, asked for permission at the start of the tribunal hearing to intervene in the process, wanting more disclosure on the rigged projects.

Tribunal chairman Norman Manoim dismissed their application, but the cities can pursue damages in civil court once the hearing has ruled on the fines. –