The commission said dozens of firms “colluded” over the mega-projects, in some instances allocating tenders among themselves and reaching deals “agreeing on profit margins”.
Business Day reports that the first case referred for prosecution relates to meetings held in 2006 between major industry players Group Five, Murray Roberts, Stefanutti Stocks and Basil Read, in which the firms allegedly allocated the Mbombela, Peter Mokaba, Moses Mabhida, Soccer City, Nelson Mandela Bay and the Greenpoint stadia tenders amongst themselves, while agreeing on a 17,5% profit margin on all stadia projects.
South Africa poured R20 billion into the construction and refurbishment of 10 stadiums to be used for the showpiece soccer tournament. Five of the venues were built from scratch, including the 94 500-seater Soccer City in Soweto, which hosted the opening and final matches.
The Competition Commission’s construction cartel investigation will include a total of 140 projects worth R47 billion.
While some firms refused to settle and pay fines during an initial fast-track process initiated by the Commission in 2011, 15 companies paid a collective R1,5 billion fine, of which WBHO paid a R311 million fine, Murray Roberts paid R309 million, Stefanutti R307 million and Basil Read a R95-million fine. The firms have denied collusion.
“They have denied collusive tendering, but we have evidence that they were involved in such behaviour,” said Mava Scott, spokesman for the Competition Commission.
“We have now referred the matter to the Competition Tribunal for adjudication. They face collusion charges,” he said.
The firms that were implicated and refused to settle during the initial stages will now have to face the Competition Tribunal and will have to prove their innocence. They face fines far heftier than the ones handed out during the settlement process.
Murray Roberts is the only firm that has been granted leniency in the matter for their role in implicating companies involved in the alleged collusion. Ed Jardim, Murray Roberts group communications executive told Business Day that the company received leniency from prosecution in the current matter and are not required to “settle” anything with the commission. “This referral is not related to any new cases of alleged collusion, but refers to the historical cases as previously disclosed to the commission,” he said.
WBHO has refused to settle on three projects, while Basil Read and Group Five have refused to settle on four projects they were implicated in during the fast-track process.
“We are confident that the outcome of this process will confirm that Basil Read was not involved in anti-competitive behaviour and has not contravened the Competition Act with respect to these tenders,” Basil Read CEO Neville Nicolau told Business Day.
Source: Business Day, additional reporting by Sapa