Building Racket: Penalties scrutinised

The tribunal assessing the bid-rigging scandal could uphold, reject or amend the R1.4 billion settlement.

The tribunal assessing the bid-rigging scandal could uphold, reject or amend the R1.4 billion settlement. Picture: EWN

JOHANNESBURG - The Competition Tribunal assessing a settlement reached with construction companies over collusion, may either uphold the agreement, reject or amend it.

The hearings are expected to run over the next two days following a R1.4 billion settlement reached between the Competition Commission and the large firms.

The settlements were reached through a fast track process in which firms were asked to disclose information about bid-rigging in exchange for lower penalties.

A total of 300 rigged projects were disclosed

The collusion relates to the construction of stadiums ahead of the 2010 Fifa World Cup, the upgrading of airports, highway improvement projects, building of hospitals, dams and bridges and the Gautrain.

The Competition Commission's Trudi Makhaya says the tribunal will not hear detailed evidence again but will weigh up whether the settlement is appropriate.

"It won't be a full-on hearing with all the witnesses and all everyone who was involved in the collusion."

She says there are several possible outcomes.

"Overall they could either uphold it or they could offer changes that the commission should consider."

Corruption Watch and several other organisations are expected to make representations.

The hearings are taking place in Pretoria.

SALGA TO INTERVENE

Earlier this month the South African Local Government Association (SALGA) said it will intervene in the Competition Commission's tribunal process.

The original probe uncovered widespread anti-competitive behaviour in the industry, including tender-rigging in projects worth more than R47 billion. Around R28 billion of that amount came from public funds.

SALGA Chief Operating Officer Lance Joel said there may be an opportunity for its members to see whether a settlement would be possible.

Nine municipalities across the country were affected.

'CAPE CLUB MEETINGS'

According to papers filed at the commission several companies in the Western Cape set up a group to share contracts for major construction projects known as the 'Cape club meetings'.