Johannesburg - Some of the construction companies involved in collusion and bid-rigging are working on an initiative to ensure the industry is placed on a transformative, developmental and growth trajectory for the benefit of both emerging and established contractors.
It is being developed against the backdrop of the Black Business Council (BBC) urging the Construction Industry Development Board (CIDB) to follow its regulations and ban the construction companies involved in collusion and bid-rigging from receiving government work.
Gregory Mofokeng, the BBC’s general secretary for the built environment, said this week that the council was engaging directly with some of these construction companies via the SA Forum of Civil Engineering Contractors (Safcec) about ameliorating the loss in profits suffered by some of its members because of the actions of these firms and the lack of transformation in the construction sector.
Webster Mfebe, Safcec’s chief executive, confirmed yesterday that it was leading a discussion on a voluntary rebuilding programme involving some of its big listed member companies, which were implicated in collusion. “This will be a first of its kind initiative by any company that has been implicated and/or fined for collusive behaviour in the country or internationally,” he said.
Mfebe said funds over and above the huge fines imposed by the Competition Commission would be committed to support the programme.
The Competition Tribunal confirmed settlement agreements reached last year by 15 construction companies, including seven listed firms, with the commission to pay fines totalling R1.46 billion for bid rigging and collusive tendering.
Mfebe said the main objective of the programme was to ensure the industry was put on a transformative, developmental and growth trajectory for the benefit of both emerging and established contractors.
“Under the Safcec umbrella, the companies involved are engaging key stakeholders, like the BBC, to ensure a synergistic approach in taking the construction industry forward within the broader context of transformation and the National Development Plan so that together we can assist our government towards the achievement of its targets for job creation and economic growth,” he said.
Mfebe said the details of the voluntary rebuilding programme would be revealed “at an appropriate stage”.
Mofokeng said the BBC had not yet “put a finger” on the quantum of the damages suffered by some of its members, but indicated it “runs into millions and millions of rand”.
“We are dealing with loss of profit claims. What we hope to achieve through our engagement with companies is an industry-wide initiative in line with the transformation agenda and the processes we are mulling over is to ensure there are widespread beneficiaries coming out the emerging sector,” he said.
Mofokeng expected “the whole package” to be concluded by June.
He declined to name the companies the BBC was engaging with, adding it was still trying to bring on board those companies that decided to remain outside of the process.
Mofokeng said the BBC had engaged with the CIDB about the companies that had admitted to their involvement in collusion and other anti-competitive practices, and made a verbal submission to the CIDB in a meeting calling on these firms to be blacklisted from receiving public sector work.
The law was clear on what the CIDB was supposed to do and everyone had to abide by and follow the law, he said.
Mofokeng said the context for the BBC’s view was that some of its black member firms had in the past been blacklisted from getting government work.
“We were led to believe that the CIDB will follow the regulations in this matter,” he said.
The CIDB previously confirmed that it had an obligation, in terms of its code of conduct, to deregister companies that were guilty of collusion and bid-rigging from its grading system database. Companies require a CIDB grading to bid for public sector work.
Kotli Molise, a CIDB spokeswoman, said the CIDB Act did not make any provision for it to receive any submissions related to any investigation it was undertaking. But she said the CIDB held meetings regularly with stakeholders across the industry, to discuss matters affecting stakeholders and industry development. - Business Report