Public Protector widens probe into World Cup stadium collusion

2015-04-26 16:00

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The Public Protector has launched an investigation into allegations that there were government officials who knew about the construction cartels’ rigging of 2010 World Cup stadium tenders and that they might have been complicit in the collusion.

Public Protector Thuli Madonsela confirmed the investigation this week at an event where she was speaking on the relationship between collusion and corruption.

Madonsela had been invited to address the staff of the Competition Commission to explore the areas of overlap between the work of the two bodies.

When City Press asked Madonsela for her thoughts on senior executives who had been implicated in collusive activity still being employed by South Africa’s largest construction firms, she said it would be ­improper for her to comment as her office had launched an investigation into corruption allegations relating to the construction cartel.

Madonsela said there were allegations that government officials were involved in the rigged procurement of the 2010 World Cup stadiums.

Speaking at the same event, Tembinkosi Bonakele, the competition commissioner, said former Competition Tribunal chairperson David Lewis, who now works for Corruption Watch, had always maintained there was a strong link between collusion and corruption.

He said Lewis maintained there had to be “assistance from the ­inside”.

Madonsela said collusion and corruption were “related and ­sometimes intertwined crimes of dishonesty”.

“They yield underserved benefits for perpetrators at the expense of innocent parties,” she said.

“They are criminal in nature and impact beyond the business ­environment where they take place.”

When City Press asked Madonsela if the government had an ­obligation to seek civil damages from the guilty construction companies for overcharging on infrastructure, she said state resources had to be recovered.

“When state money is lost, it must be clawed back because if it’s not clawed back, then the state’s resources have been wasted,” she said.

City Press asked Madonsela what she thought of consistent claims by senior executives in the construction sector that the cartel’s collusion did not lead to government being overcharged, and that there were no victims of collusion.

“When there has been collusion, you can’t say there are no victims,” she said. “The victims may not be direct [directly affected], the victims can be the general public.”

“Prices have been artificially inflated. The public has to live with that. We really need to deal with dishonest business practices in South Africa”

The Competition Commission’s deputy commissioner, Oliver Josie, told City Press more than 200 section 65 certificates, which allow ­victims of collusion to pursue civil damages against the guilty construction firms, had been issued.

Asked if there was political will in government to pursue these ­damages claims, Josie said he believed there was.

“Watch this space,” he added.

Josie also pointed out that the Hawks were investigating charges of fraud, corruption and money laundering against some members of the construction cartel and that, as an industry regulator, the ­Construction Industry Development Board was busy with a ­disciplinary process for guilty members.

He said the disciplinary action could take the form of blacklisting.

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