Construction cartels warned to come clean

05 February 2011 - 23:58 By LUCKY BIYASE
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Construction companies could lose millions of rands in fines as the Competition Commission cracks the whip on tender rigging in the sector.

This week the commission offered the companies, which include Aveng, Murray & Roberts, Group Five, Wilson Bayly Holmes-Ovcon and Basil Read, reduced penalties if they come clean on their involvement in cartels.

The commission's corporate leniency programme offers companies reduced fines in exchange for spilling the beans about collusion and price-fixing in the industry.

The commission's advocacy and stakeholder relations manager, Oupa Bodibe, said the process of receiving application for leniency will run until April 3. Some 65 investigations are being conducted confidentially.

Lesley Morphet, a partner in competition law at Webber Wentzel, said the commission was making a priority of sectors that most affect consumers.

He said the commission is not randomly pursuing complaints.

"It is very concerned about alleged cartel conduct, and has the perception that this conduct is rampant."

In response, Aveng issued a statement attributed to chief executive Roger Jardine pledging full co-operation with the commission.

Jardine said: "We are doing everything we can to detect past practices through internal investigations to ensure that anti-competitive behaviour of any size is prevented.

"The measures that we have in place include a compliance review, immunity and tip-off hotlines as well as ensuring that we have thoroughly trained staff on competition law.

"The construction industry is a very important sector in the SA economy, employing an estimated 400000 people.

"The behaviour of executives should not detract from the sacrifices and commitment of the hundreds of thousands of workers in this country who often put their lives on the line to deliver good roads, stadia and other infrastructure for all of us."

John Abbott, the financial director at Wilson Bayly Holmes-Ovcon, said: "All I can say is that we have met with the Competition Commission today (Friday) and we are responding to the information they have given us."

Aubrey Tshalata, national secretary-general of the National African Federation for Building Industry, said alleged criminal and corrupt collusion and bid rigging was a direct result of government's failure to provide effective leadership in transforming the construction sector.

"These corrupt players have enjoyed full government support since 1994. They have been darlings of the government and have been awarded contracts acting as monopolies in the sector."

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