Media reports over the last couple of days have revealed more positive developments in the collusion scandal that rocked the construction industry in 2013. The Competition Tribunal has issued four certificates to the City of Cape Town to enable civil claims against construction companies who are among those recently found guilty of collusion and fined a total of R1.46-billion by the Competition Commission.
The dealings of the 15 companies were exposed earlier in 2013, after a three-year investigation by the Competition Commission into alleged collusion and bid-rigging in numerous major projects, some of which involved 2010 Fifa World Cup infrastructure.
In a submission made in mid-2013 to the Competition Tribunal, Corruption Watch called for all those affected by the collusive tendering in the construction industry – including municipalities, provinces and private entities – to institute civil claims for damages suffered.
Paying the price for corruption
Cape Town’s deputy mayor Ian Nielson said that certificates were received against Aveng, Stefanutti Stocks and Wilson Bayly Holmes-Ovcon, for work relating to the construction of the Cape Town stadium.
The three companies were among those who came to various underhanded agreements, such as allocating the tenders for the building of stadiums in Cape Town, Mbombela, Polokwane, Durban and Port Elizabeth among each other, providing each other with cover tenders and planning to extract a margin of 17.5% on these projects.
More certificates are likely to be issued in due course – the South African National Roads Agency has applied for 35 certificates relating to bid-rigging of road building tenders, which the tribunal is reportedly preparing. This could pave the way for a slew of civil claims.
Bringing corrupt companies to book
Media reports also state that the Directorate for Priority Crime Investigation – known as the Hawks – has provided a case number to Cosatu for criminal charges laid by the trade union against the 15 construction companies
Cosatu submitted a memorandum to the police in mid-November relating to the construction companies. The document was handed over to station commander Brigadier Ronnie Rajim by the trade union’s Gauteng secretary Dumisani Dakile, and a docket was opened accordingly.
The charges brought by Cosatu related to “crime and corruption” in the construction of World Cup infrastructure and the Gauteng Freeway Improvement Project. The memorandum was forwarded to the Hawks, who subsequently issued a case number.
“The construction companies have openly acceded and confessed to their part and role in the corrupt practices called collusion during the construction of the stadiums and the freeway project,” said the memorandum. “We believe that all crime must be treated the same and all those involved must also be treated the same and in particular the private sector which in all instances condemn government but being the causes of corruption in the country”.
The trade union called on the Hawks to “arrest all those that have been implicated in this corruption and for them to face the music, just like many others who have been charged and prosecuted for such acts. They are stealing millions of rands which ought to be used to provide basic public services to the poor and they have pocketed such resources for their narrow greed”.
