THE city has been given the green light to pursue a civil damages claim against the companies which colluded on the R4.5 billion Cape Town Stadium contract after receiving certificates which prove collusive conduct.
Five months after the Competition Commission reached settlement agreements with 15 major construction firms and fined them R1.46bn in total for illegal anti-competitive conduct, the Competition Tribunal issued certificates which pave the way for clients, like the city, to lodge civil claims against corrupt companies.
Last week, the tribunal issued three certificates in favour of the city in the construction of the Cape Town Stadium. The commission’s investigation, which started in 2009, exposed corruption, price-fixing and bid-rigging on a grand scale in the construction industry involving some of the country’s biggest firms and projects such as the World Cup stadiums.
Deputy Commissioner Trudi Makhaya said the certificates were confirmation that a company admitted to anti-competitive conduct, adding the certificates were needed for any party to institute civil claim proceedings at a high court.
Deputy mayor and mayoral committee member for finance Ian Neilson said: “These certificates confirm that collusion has taken place with the stadium, so we don’t have to prove that that in court.”
The city only has to prove that there was an overcharge on the stadium and determine how much in damages it could claim from the companies involved in its construction.
The city’s claim will be against Murray Roberts and WBHO Construction, which built the stadium in a joint venture.
Neilson said the soonest the city could lodge its civil claim in the high court would be early next year.
City-appointed experts to the tune of R4 million are still calculating how much the city could claim.
The three certificates in the construction of Cape Town Stadium were issued based on admissions by Aveng, Stefanutti Stocks and WBHO.
In its admission, Aveng spoke about the group of companies, Grinaker LTA, WBHO, Murray Roberts, Group Five, Concor, Basil Read and Stefanutti, which met twice in 2006 to reach an agreement on the 2010 World Cup stadiums.
The firms agreed to allocate the Mbombela, Peter Mokaba, Moses Mabhida, Soccer City, Nelson Mandela Bay and Cape Town stadium tenders among themselves and to exchange cover prices. The firms agreed that they would aim to obtain a 17.5% profit margin in all the World Cup stadia projects.
Neilson said he was not aware of any other city projects that could have been rigged.
“Once completed, the city will need to review its approach to companies found guilty and decide whether they should be blacklisted. Should we decide to pursue blacklisting, the city would have to follow due process and allow the companies to state their case,” Neilson said.
Cosatu has also lodged fraud complaints against the 15 colluding firms which the Hawks are investigating “because it is criminal to inflate prices, it’s fraud, it’s corrupt and these people must go to jail”, said its provincial secretary, Tony Ehrenreich.
Cosatu is also raising questions about why some of the colluding firms still have government contracts.