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Construction cartel under more pressure

Jul 04 2013 17:51 Fin24
Ebrahim Patel.

Economic Development Minister Ebrahim Patel. (Picture: Werner Beukes, Sapa) (Werner Beukes)

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Cape Town - The government intends to institute civil claims against the construction firms which were involved in a collusion racket, reports stated on Thursday.

Economic Development Minister Ebrahim Patel said that the claims could amount to almost R2bn, reported EWN.

The announcement came after a meeting of the Presidential Infrastructure Co-ordinating Commission, which was chaired by President Jacob Zuma on Wednesday evening.

Patel said cartel activity in the construction industry represents large scale corruption and fraud.

The Competition Commission said in June that 15 construction companies agreed to pay fines that collectively total R1.46bn for collusive tendering.

This followed a probe into bid-rigging involving 300 projects valued at R47bn. R28bn was related to public sector contracts and R19bn concerned private sector projects.

The three firms which did not accept the settlement offer were: Group 5, Construction ID and Power Construction.

"Those who have not settled will be prosecuted," Patel said on Thursday, according to the SABC.

"We repeat our call on companies that have not settled to use the time before the Competition Tribunal sits to settle with the commission".

The Congress of SA Trade Unions accused the bosses of the companies involved of treason, while the National Union of Metalworkers SA said that they should be prosecuted.

 - Fin24

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