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Building Row: Govt considers civil action

Govt says those who colluded and acted against public interest must be held accountable.

Minister Ebrahim Patel  says those who colluded and  acted against the public interest must be held accountable for their actions. Picture: EWN.

PRETORIA - Economic Development Minister Ebrahim Patel says the government will consider appropriate civil claims against the construction companies implicated in a collusion racket.

The minister says those who colluded and acted against the public interest must be held accountable for their actions.

The claims will be in addition to the penalties imposed by the Competition Commission which could amount to nearly R2 billion.

The commission's probe uncovered widespread anti-competitive behaviour, including tender-rigging in projects worth more than R47 billion.

Patel made the announcement in Pretoria on Wednesday following a meeting of the Presidential Infrastructure Coordinating Commission.

He says the commission considers the cartel activity as large scale corruption and fraud.

The minister says the actions of these companies have cost the economy dearly.

Patel says the actions have also led to significant cost increases in government's build programme.

He says law enforcement agencies must also consider taking action because it appears fraud was committed.

Last month, the competition commission fined 15 companies operating in South Africa a collective fine of R1.4 billion for bid rigging dating back to 2006.

The fines have been described as a small percentage of the extent of bid-rigging, which is estimated to be worth nearly R50 billion.

It follows an investigation led by Patel to rid the industry of corruption.

The Competition Commission's Trudi Makhaya said the next step would involve public hearings, where settlements would be scrutinised.

She added the body only dealt with companies and not individuals.

"We don't impose criminal sanctions. Other agencies can deal with the individuals where there is corruption, fraud, racketeering etc."

Billions were lost through major projects such as the building of stadiums for the 2010 FIFA World Cup, the upgrading of airports, highway improvement projects and the building of hospitals, dams and bridges.

Meanwhile, PPC CEO Ketso Gordhan's has proposed an 'infrastructure Codesa', wherein all parties involved in infrastructure development would come together to find the most efficient means for its implementation.

Some members of the industry have said they would strongly support this.