This ranges from cover pricing where firms submit “bogus tenders” in order for one firm to win the tender, to other practices such as ‘losers fees’ where companies would pay a fee to the losing bidder.
The investigation also revealed meetings to divide markets and agree on margins, co-ordination of tenders and subcontracting used to compensate losing bidders.
In a press conference yesterday, Shan Ramburuth, Competition Commission Commissioner, stated that 300 projects were investigated, valued at a total of R47bn.
Settlements were reached on collusion pertaining to only 140 projects as the law only allows the commission to levy penalties for projects concluded after September 2006. Before this date transgressions are beyond the prosecutorial reach of the Competition Act.
CitiBusiness understands that the 140 projects include the following six World Cup stadia: Mbombela, Peter Mokaba, Moses Mabhida, Soccer City, Green Point and Nelson Mandela Bay, where evidence came forth of meeting to organise tenders and set margins.
The full consent agreement,
containing these details, has been lodged with the Competition Tribunal.
In total, 21 companies took part in the fast-track process in which companies were promised leniency in exchange for coming forward to divulge details on deals in which anti-competitive practices had taken place. Of the 18 companies where negotiations for settlements took place, settlements were reached with 15 companies.
Settlements have not yet been reached with Group 5, Power Construction and Construction ID.
Ramburuth emphasised that for the companies that decided not to take part in the fast-track process, but have been implicated, inves- tigations will now follow in the
due course of the authority and responsibilities of the Competition Commission.
He said that if companies, with which settlements have been reached for certain projects, have been implicated in other projects and this comes out in the investigations, the law will follow its course and they won’t be exempt from further penalties.
Collectively, the 15 companies have agreed to proposed penalties totalling R1.46bn – the largest collective fine proposed yet by the Competition Commission.
The Competition Tribunal will have to confirm, deny or amend these penalties.
Ramburuth stated that the commission has been in discussions with the National Prosecuting Authority (NPA) regarding the findings of the investigation, but that it has an undertaking from the NPA that it will not proceed until such time as the process is concluded – meaning when the tribunal decides on the penalties imposed.