Government wants more payments from colluding World Cup builders

The R1.5-billion in penalties is not the end of the story with the construction industry, said Economic Development Minister Ebrahim Patel. (David Harrison, M&G)

The R1.5-billion in penalties is not the end of the story with the construction industry, said Economic Development Minister Ebrahim Patel. (David Harrison, M&G)

South Africa’s government is putting pressure on construction companies to make further payments as punishment for rigging contracts to build stadiums for the 2010 FIFA Soccer World Cup and other projects.

Antitrust authorities fined 15 builders, including Murray & Roberts and Aveng, a total of R1.5-billion in June 2013, after a probe that spanned almost four years found they colluded to drive up prices.

“The R1.5-billion in penalties is not the end of the story with the construction industry,” Economic Development Minister Ebrahim Patel told lawmakers in Cape Town on Tuesday. “We are now in discussion with the construction industry on a restitution package for their collusion and price fixing.”

The Competition Commission probe found that companies held meetings to rig profit margins on the construction of six stadiums ahead of the soccer tournament. Murray & Roberts, South Africa’s biggest listed builder, and competitors met twice and agreed to exchange cover prices, allocate tenders and aim for a 17.5% margin, according to documents on the competition tribunal’s website. The papers also detailed collusion on projects ranging from roads to offices.

Murray & Roberts was fined R309-million, Aveng R307-million, Wilson Bayly Holmes-Ovcom R311-million and Stefanutti Stocks R307-million.

Patel didn’t specify which companies are being targeted to make additional payments or how much the government expected to raise.– Bloomberg

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