Colluders in construction industry may face more punishment
Hlengiwe Khumalo, acting CEO of the Construction Industry Development Board. CONSTRUCTION companies hit with a collective R1.46bn fine for bid-rigging and collusion have been warned they face the prospect of further sanctions, including possible disqualification from state tenders. Construction Industry Development Board (CIDB) acting CEO Hlengiwe Khumalo said on Monday the industry body would launch its own investigation into whether companies that admitted to bid-rigging and collusion should be penalised further.
Last month, the commission reached a settlement with 15 construction firms, including Murray & Roberts, Basil Read and Esorfranki, for contravening the Competition Act. They agreed to penalties collectively amounting to R1.46bn.
On Monday, the tribunal confirmed the settlement agreements with all the firms, except for Aveng and Guiricich Bros Construction pending the receipt of outstanding information on them. The CIDB is a statutory body and is empowered to fine a company up to R100,000, deregister it and bar it from public sector construction work tenders.
A ban could have a significant effect on the profitability and job-creation abilities of the affected construction companies. Deregistration, should it be imposed, might have as serious an effect on the government and as on the firms.
The companies involved are big players and they alone have the financial capacity and expertise to undertake large infrastructure projects. Ms Khumalo would not be drawn on the possible negative effects of these penalties on the industry, saying only that "the CIDB does not wish to speculate on the impact of any sanction to the economy or job creation".... Read the full, comprehensive news article and discuss at Business Day