Business

Commission probes collusion in construction sector

Staff Reporter

The Competition Commission has initiated an investigation into collusive practices in the construction industry, it said on Tuesday.

The Competition Commission has initiated an investigation into collusive practices in the construction industry, it said on Tuesday.

“The commission has received several applications for corporate leniency from construction companies for collusive practices with respect to certain construction projects,” deputy commissioner Tembinkosi Bonakele said in a statement.

In particular, it was revealed that fixing margins for tenders and compensating the losing bidder could be prevalent in the sector.

“The commission’s preliminary investigations also show that construction firms, which will ordinarily bid independently, often form joint ventures when bidding for certain projects.

“Insofar as they bring competitors together, these joint ventures may be used as a platform to engage in collusive practices.”

Some of the joint ventures had permanent status and continued to be used by competitors in the industry as a platform for sharing sensitive information.

The commission had initiated an industry-wide investigation against Grinaker, Stefanutti, Group Five, WBHO, Concor, Liviero, Giuricich, Hochtief, Dura, Nishimatsu, Esorfranki, VNA Pilings, Rodio, Diabor, Gauteng Piling, Fairbrother, Geomechanics, Murray & Roberts, Aveng and other firms.

The collusive practices might also slow down delivery of key infrastructure as well as houses in the country.

Experience had shown that such collusive practices were also prevalent in other countries.

In The Netherlands and the United Kingdom a large number of construction firms took advantage of corporate leniency policies to come forward once investigations were launched.—Sapa

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