GVK fined R6m on price fixing, collusion charges

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Construction company GVK-Siya Zama has agreed to pay an administrative penalty of over R6m after being charged with price fixing, market division and collusive conduct in the construction industry.

In a statement issued on Tuesday, the Competition Commission said it had referred an agreement it had reached with GVK to the Competition Tribunal for confirmation as an order.

In terms of the agreement, GVK had undertaken to pay a penalty. In February 2008, GVK entered into an agreement with Group Five to collude in the tender issued by the Mediclinic Group.

Group Five provided a cover price, higher than theirs, to GVK to tender for the construction of the Cape-Gate Mediclinic Hospital in Brackenfell, Cape Town, the commission said.

"GVK also entered into a collusive agreement with Neil Muller Construction in July 2010, and tendered for the Tygervalley Shopping Mall. NMC provided a cover price, higher than theirs, to GVK to tender for minor alterations and extensions towards the Tygervalley shopping mall," the statement added.

The commission said GVK also entered into another agreement with Neil Muller in December 2010, to tender collusively with regard to the tender issued by Akila Trading. According to the commission, NMC provided a cover price, which was higher than theirs, to GVK to tender for the construction of a new warehouse and office buildings project for Akila Trading.

"This matter is one of the remainders of the construction cartels investigation which were initiated in 2009 with regards to the bid-rigging and collusion in the construction of the stadia for the 2010 FIFA Soccer World Cup. GVK did not apply for immunity in terms of the Commission's Corporate Leniency Policy," the commission said.

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