Construction cartel: Salga wants access to full records

The Competition Commission legal counsel David Unterhalter said the challenge was to punish illegal behaviour but not to make fines so high that it crippled companies.

He was speaking on Wednesday, the first day of competition tribunal hearings. "The challenge was not to make accumulative penalties so high, and firms were forced to pay millions of rands, that some companies would not survive, and the remainder would be so affected that the were unable to take part in the country's building plan."

Fifteen construction companies, who made a fast-track settlement agreement with the Competition Commission after being found guilty of bid rigging, appear to have been let off relatively lightly – financially and legally – with a R1.46-billion collective settlement.

Unterhalter said there were some contraventions that fell outside the fast track process which the Competition Commission was still investigating.

He said these "legacy" investigations would be made public in future.

The commission did approach various stakeholders, including Eskom and the South African Local Government Association (Salga). Parliament, municipalities and unions to discuss the penalty. "If those public bodies choose to take civil action against these parties, then it is up to them."

He said that the fast track process had attracted interest internationally with the intention to replicate the process.

Full records of agreements
Salga and the Gauteng government on Wednesday asked the competition tribunal to allow them access to the full records of the agreements between the Competition Commission and the 15 construction companies.

The hearings are expected to run over the next two days in Pretoria.

Salga and the Gauteng government have argued that the information made public by the Competition Commission as a result of the fast-track process, rather than an investigation, does not contain information they require to make a proper submission to the tribunal.

The legal team for Salga said they were clients in many of the projects that were declared as relating to the 2010 Fifa Soccer World Cup and therefore have a direct interest.

The records will show how fines were calculated and the value of projects under scrutiny. They also want to intervene in the tribunal process to ask questions they believe have not been addressed.

Settlement agreements
One of their proposals is that the hearing adjourns for a few days to allow them an opportunity to read the records. They said they may decide it is unnecessary to intervene after reading the records.

David Unterhalter, representing the commission, argued the application suggested that the commission had not considered public interest when it came to the settlement agreements.

He also argued that Salga and the Gauteng government had nothing to contribute to the discussion.

Salga replied that by the nature of the fast-track agreement, much of the information usually contained in the documents was missing. This, it said, made it difficult to tell if the R1.46-billion fine was sufficient. It said it could not say what its contribution could be without the full information.

The tribunal, which has raised concerns about the impact of a delay, is to return later on Wednesday with a decision.

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