Johannesburg - The Competition Tribunal was yesterday told that Power Construction was not guilty of price fixing, despite submitting a cover price to Haw & Inglis for a South African National Roads Agency (Sanral) tender.
Martin Brassey, senior counsel for Power Construction, said his client was admitting the submission of a tender for the purpose of ensuring at least three tenders were submitted, but did not admit its conduct had any influence on the price that was set by Haw & Inglis.
Brassey said if there was a sham bid to secure the evaluation of the bids that had no impact on the price, then there was no price fixing or other manipulation of the terms of the tender and no contravention the Competition Act.
The contract for periodic maintenance of the N1 from Touws River to Laingsburg was awarded to Haw & Inglis in July 2006.
The commission alleged that line with the terms of the collusive agreement, Power Construction submitted its tender for the N1 contract with a tender price of R99.98 million and Haw & Inglis submitted its tender price of R98.5m.
Power Construction Western Cape is now a shell company following a corporate restructuring undertaken by Power Construction. The Competition Commission referred the case to the tribunal for prosecution after Power Construction decided against settling the case.
Power Construction brought an application seeking to prevent the tribunal from hearing the case, arguing the complaint had expired and the commission cannot impose a penalty on a firm that has not contravened the Act.
Terry Motau, senior counsel for the commission, said the collusive conduct complaint also included bid-rigging in terms of cover pricing and Haw & Inglis was alive to the fact that there was a prescribed minimum number of bidders for the tender to move to adjudication.
“It went to find a bidder who had no intention of winning the bid and fixed the price with that particular participant. How they can contend that conduct does not amount to price fixing we don’t understand,” he said.
Motau claimed it was too limited an interpretation to accept that price fixing would only be applicable where Power Construction received a benefit for submitting a cover price.
“But for the submission of the sham cover bid, it (Haw & Inglis) would not have received the tender or at the price at which it was awarded and the price it submitted,” he said.
Motau claimed the September 1, 2009, initiation of a compliant against several specified construction companies also included Power Construction and the case had not prescribed and the commission was not required to mention a firm by name in initiating a complaint.
He said the liability transferred to Power Construction because it was not possible to impose a penalty on Power Construction Western Cape following the corporate restructuring.
Yasmin Carrim, the chairperson of the tribunal panel hearing the case, indicated they did not think they could make a determination of the issues raised without hearing evidence.
The case was postponed.
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