Where Nkandla meets the cartel

2013-07-21 10:00

South Africa’s private sector is often a source of great pride. It is laced through with innovators in medical aid and insurance, in banking, in pay TV, in mining, in tourism and in grilled chicken. We have fine business leaders who can take the top table in mahogany rows around the world.

But we also have remnant practices that will hold our economy back if not nipped in the bud. There are sectors where uncompetitive business practice has become threaded into the DNA of how companies operate.

The construction sector, though it is in denial, has been shown to be deeply collusive.

Companies have paid about R1.4?billion, small chips really, in fines for colluding to set prices on numerous projects, including World Cup stadiums, big mining projects and various roads.

More than 300 projects were investigated across the private and public sectors, with fines levied on about 90 of them for price-setting and tender-rigging, among other practices.

If we are to beat corruption (or at least limit it), the fight must be fought in all spheres. For what is the difference, really, between the rampant spending on President Jacob Zuma’s estate at Nkandla and price-rigging on public projects? Nothing.

They both abuse the public purse for private gain, reflect poor project management skills across the economy and point to outcomes that distress the fiscus and reveal uneconomic and distorting outcomes, both financial and political.

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