CIBD to tackle tender collusion
Updated | By Neo Leeuw
Construction firms which collude to obtain public tenders could be barred from ever again doing business with the government, Parliament's public works portfolio committee heard on Tuesday.

Construction firms which collude to obtain public tenders could be barred from ever again doing business with the government, Parliament's public works portfolio committee heard on Tuesday.
Construction Industry Development Board (CIDB) acting CEO Hlengiwe Khumalo told MPs this would involve cancelling a company's registration with the board, a listing essential for firms seeking to obtain government construction tenders.
"This is basically de-registration; to de-register the contractor completely from the CIDB's register of contractors and not allow them ever to register with the CIDB. That means taking them out completely from doing government work."
This was among sanctions the board could apply in terms of its own regulations, she said.
The committee was being briefed on the outcomes of the Competition Commission's investigations into the involvement of South African construction companies in "collusive practices".
According to a document tabled at the briefing, this involved about 300 projects -- including sports stadiums, other buildings, and roads around the country -- to a value "above R26 billion".
In June, 15 companies settled with the commission, agreeing to pay R1.46 billion in penalties. The deal was struck in terms of a so-called fast-track process.
The settlements were reached with respect only to projects concluded after September 2006. Before this date, transgressions are beyond the legal reach of the Competition Act, in terms of which the commission operates.
On Tuesday, Khumalo told the committee the board -- a statutory body mandated to promote a regulatory framework for the sector -- was preparing an investigation of its own.
It was in the process of appointing legal advisers and an investigating officer.
"The CIDB considers collusion in the industry unacceptable. Action will be taken through proper processes. We are preparing ourselves...," she said.
The board needed to look at sanctions "commensurate with damage that has been made".
It also needed to deter such practices in the future, "and punish, where we need to punish... through the proper processes".
Among matters being looked at was the prescription period.
"The Competition Commission mentioned that in their final reports, they have not considered projects that were before February 2006. Should we, as the CIDB, be considering [such] prescription? Or should we go beyond?"
What had come out at the tribunal hearing was that collusion in the industry had started "long ago", Khumalo said.
Among the 15 companies listed in the Competition Commission's June 24 settlement agreement are some of South Africa's top construction firms, including Aveng, Murray and Roberts, Stefanutti, and WBHO, each of which were penalised more than R300 million.
Speaking to Sapa during a break in proceedings on Tuesday, Public Works Deputy Minister Jeremy Cronin said the government hoped to send "a very strong signal" to construction companies that collusive behaviour would not be tolerated.
Among measures being looked at were civil cases directed at the big companies involved, and criminal cases directed at individuals.
Cronin was responding to a question on how the CIDB might proceed, given that many of the skills needed to tackle the major construction projects envisaged in the government's National Development Plan nested in the very firms found to have colluded on tenders.
He said any action taken "can't be about demolishing capacity and jobs, tens of thousands of jobs, but at the same time it can't be slap on the wrist".
It was necessary to "send a very strong signal to reduce this behaviour in future as much as possible", Cronin said.
-Sapa
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