Lloyd Gedye and Niren Tolsi

 

The Competition Commission referred the last case arising out of its investigation of bid rigging in the construction sector to the Competition Tribunal on 26 October 2015, leaving 15 cases still to be heard.

Commissioner Tembinkosi Bonakele said its “focus will now be on the litigation of cases that were referred to the tribunal for prosecution”.

“The construction sector remains one of the key sectors of the economy which government is prioritising to drive infrastructure development,” he said. “It is therefore necessary to address any collusive conduct which might inflate the costs of rolling out infrastructure development.”

The commission launched its investigations in 2009. It uncovered pervasive collusion, the sheer volume of transgressions compelling the commission to launch the Construction Fast Track Settlement Process in February 2011 to speed up the resolution of cases.

It has uncovered 300 rigged projects worth a total of R47 billion: R28 billion for public infrastructure projects and R19 billion for private infrastructure. Rigged projects include roads, bridges, World Cup stadiums, mine housing complexes for migrant workers, university residences, convention centres, factories, office blocks, shopping malls, dams and mining infrastructure, among others.

In 2013, the commission settled with 15 of the 18 firms that participated in the process after they agreed to pay R1.4 billion in fines. The tribunal confirmed the settlements in July 2013.

The second phase of the commission’s inquiry involves investigating firms that had not participated in the fast-track settlement but were implicated in certain projects by firms that had. Also included is the investigation of firms that participated in the fast-track process but settled only certain projects and refused to settle others in which they were implicated, as well as firms that refused to settle projects they had disclosed in their original settlement applications.

The commission is investigating 24 firms and 31 projects in phase two. An additional 20 cases were not referred to phase two because of insufficient evidence, according to the commission.

 

Main Pic: Construction work in progress by Delwyn Verasamy

This work was assisted by a Taco Kuiper Grant from the Valley Trust, administered by Wits Journalism.


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