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25 June 2013 | Adam Leach
The South African Competition Commission has issued penalties totalling R1.46 billion ($94.5 million) to 15 construction firms that admitted engaging in collusive tendering.
The settlement was agreed through the Construction Fast Track Settlement Process, which offers reduced fines in return for full and truthful disclosure from firms engaging in bid rigging. Four of the 15 companies included in the settlement were fined more than R300 million ($19.4 million. WBHO was hit the hardest, receiving a fine of more than R311 million.
Shan Rambruth, competition commissioner, said: “In revealing the extent of collusion in the construction industry, the Commission’s fast-track settlement broke up existing cartels and created awareness of collusive practices in the industry. Embedding a competitive culture will be critical to bringing down the costs of future infrastructure investments and will incentivise firms toward innovation and efficiency in future projects.”
During its investigation into bid rigging within the South African construction sector, the Competition Commission identified more than 300 instances where firms had colluded to unfairly alter the tendering process. It also received responses to its offer of a fast-track settlement from a further six firms.
A number of firms escaped penalties, as the Commission’s prosecutorial reach only covers transgressions after September 2006. It will now move to prosecute firms that did not reach a settlement through the fast-track process.