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Colluding firms urged to come clean

Johannesburg - The Competition Commission on Tuesday took the unusual step of offering a special deal to construction firms involved in anti-competitive behaviour in exchange for information and a reduced penalty.

It proposed a "fast track settlement" for companies that have colluded in bidding for both public and private sector projects.

The commission is investigating 65 bid-rigging cases, involving more than 70 projects worth about R29bn.

It has urged the firms to come clean; if they comply with certain conditions, they are likely to receive reduced penalties compared to what they would get for separate prosecution of each transgression.

"Construction firms are invited to apply for fast track settlement with complete and truthful disclosure of information regarding collusion," the commission said.

"In addition, the firm must undertake to cooperate and cease anti-competitive conduct. Upon complying with the requirements, the commission will settle with participating firms with a reduced administrative penalty compared with the penalty if each transgression were to be prosecuted separately," it said.

The commission's construction industry probe has uncovered widespread anti-competitive conduct through various arrangements.

Major companies in the sector have held meetings to allocate tenders and police each other's behaviour through a structure referred to as "The Party".

The commission said it would pursue the investigation against those firms which did not take advantage of its offer.

Markets for construction products such as long steel, mining roof bolts, concrete pipes, plastic pipes, wire mesh, reinforcing steelbar installation and pilings construction have also been investigated.

Subsidiaries of several major construction companies are involved in these cartels, the commission said.

A case against the primary producers of reinforcing steel bar (the steel mills) was previously referred to the Competition Tribunal. The commission said it would refer cases in rebar and pilings.

"In addition, 150 marker applications (indicating an intention to apply for corporate leniency), some relating to more than one project, have been received by the commission. Most of these corporate leniency applications were submitted by Group Five [JSE:GRF] , which has been cooperating with the commission since 2009.

"In addition, applications were received from Grinaker-LTA and Murray & Roberts Holdings [JSE:MUR] , who have committed to cooperate with the commission," it said.

The fast track settlement process will work concurrently with the commission's corporate leniency policy. A company that applies for settlement may also apply for leniency.

 

 

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