Sparks fly in building cartel probe

2013-02-03 10:00

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In tenders worth R30bn ‘they have ripped off taxpayers and are anti-transformation’ Lawrence Mavundla has always been aware something may be stinking in the construction industry.

“We have always suspected there is something and these cartels are colluding and fixing prices,” the National African Federated Chamber of Commerce president told City Press in the wake of the tender-fixing scandal.

He says the government should blacklist companies found guilty of collusion and corruption and added the Hawks should not grant any immunity to any wrongdoer.

“They would sit around the table and plan around a tender that is not out yet, and bid as a big group with one price. You, as a black small contractor, will have no chance of getting the contract.

“We can’t allow something like this to happen because they have ripped off the taxpayers and they are anti-transformation,” he said.

“Politicians are always blamed and yet they are not the ones fixing prices but the contractors,” charged Mavundla.

Stefanutti Stocks acknowledged and took responsibility for having participated in unlawful and cartel-like behaviour, which had been a feature of the construction industry for years, said chief executive Willie Meyburgh.

His comments come as the state prepares to launch a massive R844?billion public infrastructure development programme.

The Hawks investigation follows a probe, launched in February 2011, by the Competition Commission into the construction industry, its biggest investigation to date.

The commission has said 20 firms have confessed to irregular conduct in more than 300 projects and tenders worth close to R30?billion.

Meyburgh said that after their approach to the NPA other companies had done the same.

He said he hoped the process would restore the integrity of the construction industry.

Murray & Roberts chief executive Henry Laas said his company was the first in the sector to bring anti-competitive behaviour and collusive misconduct to the attention of the Competition Commission.

“The conduct in the past was the isolated and independent action of individuals,” said Laas.

He added the misconduct was related to people no longer working for the company or for companies acquired by Murray & Roberts in 2006/7.

Laas said Murray & Roberts identified a “limited number” of projects where the Competition Act may have been transgressed.

A WBHO spokesperson said the company was engaged in discussions with the Competition Commission which involved “a small number of projects”.

WBHO said it was not aware of any criminal investigation and rejected allegations its executives acted in such a manner.

Group Five chief executive Mike Upton said his company was cooperating with the Competition Commission and had to keep details confidential.

Aveng chief executive Roger Jardine said his company had worked to eradicate unethical practices, and had investigated instances where it was aware of breaches and irregularities.

It had also cooperated fully with the Competition Commission.

Competition Commission spokesperson Trudi Makhaya said she could not comment on any developments as investigations were still pending.

Neither the NPA nor the police responded to requests for comment, but an NPA spokesman said the agency was concerned about the publication of the affidavits, which “cannot be allowed to go ahead”.

John Willmott is now an executive at a major Australian construction company and did not respond to requests for comment.

Neither did Richard Saxby, now an independent consultant. Graham Browne’s only comment was that he had cooperated with the Competition Commission.

Duncan Barry and Mike Wylie said their response was the same as WBHO’s and that of Hylton Macdonald was included in Aveng’s comments.

Neither Trevor Robinson nor Basil Read responded to requests for comment.


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