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Johannesburg - Competition authorities said on Thursday that anti-competitive behaviour in the construction and infrastructure sectors has been costly, as it hits taxpayers' pockets.
"At the end of the day we are talking about more taxpayers' money being used than what would have been if there hadn't been any anti-competitive behaviour," competition commissioner Shan Ramburuth told media on Thursday.
Ramburuth said any possible anti-competitive conduct in intermediate industrial products such as steel and concrete could inhibit growth at a time when government is spending more than R700bn on upgrading public infrastructure over the next three years.
The steel and concrete industries have a history of anti-competitive behaviour, and the commission is "keeping an eye" on them.
In February, the commission uncovered a 34-year-old cartel in the precast concrete market. This resulted in Infraset, a subsidiary of JSE-listed Aveng, being fined R46.3m.
The investigation was sparked by a clemency application under the commission's corporate leniency programme made by Murray & Roberts subsidiary Rocla. Ten other companies were involved in collusive activities.
He explained that competition authorities are also keeping an eye on the intermediate industrial products - such as steel and cement - as they too can lead to inflated pricing which could add much more to the final product price.
In late 2007, ArcelorMittal South Africa, fomerly Mittal Steel SA, was fined R692m for charging excessive prices for its flat-steel products.
According to the competition commission's chief economist, Simon Roberts, who is also the acting manager of enforcement and exemptions at the commission, anti-competitive behaviour has negative consequences for consumers. This is because a high barrier of entry into the market allows the few players in the market to increase their prices - which is an unneccessary cause of inflation.
"If we never uncover cartels, then they'll never change. We need to have a credible threat like a penalty [so that they will change their behaviour]."
- Fin24.com