THE Directorate for Priority Crimes Investigation, the Hawks, has distanced itself from weekend reports about corruption and illegal business practices in the construction industry, saying the reports were inaccurate.
However, Hawks spokesman Capt Paul Ramaloko confirmed the unit was investigating tender irregularities, including the inflation of tender costs, but declined to say which companies were involved or how much money was at stake. He said "several tenders" were involved. The Hawks would only make an announcement once their investigation had "matured", but Capt Ramaloko could not confirm when that would be.
The Competition Commission’s head of advocacy and stakeholder relations, Trudi Makhaya, emphasised that the Hawks’ investigation into the industry was a completely separate process from the fast-track settlement project for the construction industry that started in February 2011 after the commission’s own investigation into bid-rigging and cartel activities relating to major infrastructure projects, including the 2010 Soccer World Cup stadiums and the Gauteng Freeway Improvement Project.
More than 20 firms confessed to irregular conduct in more than 300 projects and tenders worth close to R30bn.
Ms Makhaya said their investigations, in instances where they could not reach a settlement agreement with companies, would culminate in a referral for adjudication to the Competition Tribunal. The tribunal has the power to levy an administrative penalty of a maximum of 10% of a guilty firm’s turnover.
The City Press and Rapport this weekend reported on sworn affidavits made by executives of the firms, admitting to criminal activities.
Ms Makhhaya earlier told Business Day the commission expected to reach settlements with most companies who applied for leniency from prosecution before the Competition Tribunal.
The South African Federation of Civil Engineering Contractor (Safcec) on Monday urged its members to fully investigate and monitor all their operations with regard to competition law.
"Since the commencement of the Competition Commission investigation in 2011 Safcec has repeatedly encouraged its members to co-operate fully with the relevant authorities" said Webster Mfebe, executive director of Safcec, in a statement.
Safcec said it viewed full disclosure by all members involved in anti-competitive behaviour as an opportunity to clean up the industry once and for all. Members are advised to run awareness programs to ensure that employees, stakeholders, and subcontractors do not breach competition legislation. Where isolated irregularities are found, members should immediately engage with the Competition Commission and other relevant authorities, the statement read.
Shares of South African construction companies such as Stefanutti Stocks fell on Monday after the weekend reports.
WBHO said on Monday it was in confidential talks with competition authorities about a number of projects but refuted reports that it had engaged in any criminal conduct.
Stefanutti Stocks had lost 5.63% to R10.05 at 12.20pm, while WBHO was down 3.42% to R149.23. Basil Read fell 1.72% to R11.40.
With Reuters
