Call to blacklist big construction firms

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Copy of ca p4 Construction Work CBD-3392 Independent Newspapers File picture: Henk Kruger

Johannesburg - Some of the country’s biggest construction companies, who colluded to swindle government out of billions of rand, have received at least R1.5 billion in state contracts since the scandal broke a year ago.

And now their black-owned competitors want them blacklisted and barred from doing business with the government.

Contracts awarded since February last year, when the scandal emerged, include:

* A R127.5 million contract awarded to WBHO by the National Department of Public Works’ Port Elizabeth regional office to build the National English Literary Museum in Grahamstown.

* In February, two contracts worth over R101m were announced by the Development Bank of Southern Africa for Stefanutti Stocks to build Phephetso Senior Secondary and Lehutso Primary schools in the Free State.

* SA National Roads Agency Ltd (Sanral) gave Basil Read a R240m contract to build the new Redhouse Chelsea Interchange on the N2 in Port Elizabeth in September.

* Last month, Basil Read announced it had secured two projects worth over R400m by Eskom and Sanral at the Medupi power station and to rehabilitate part of the N8 from Kloofeind to the Walter Sisulu Road Interchange in the Free State respectively.

* Last year, the Gauteng Roads and Transport Department awarded contracts worth R545m to Power Construction and Stefanutti Stocks to upgrade and rehabilitate roads in Ekurhuleni and Tshwane. Power got a R239m contract, while Stefanutti Stocks bagged a R306m contract.

* In July, the Msunduzi Municipality awarded WBHO two contracts worth R39.1m to replace and rehabilitate defective sewerage reticulation.

* This week, the Western Cape Human Settlements Department announced it had awarded Power Construction a R41m contract to build 219 housing units and services as part of the Thembelihle Housing Project.

Power Construction is one of the three companies that did not accept the Competition Commission’s settlement offer in terms of its fast-track process.

Others are Group 5 and Construction ID, and the commission will investigate and possibly prosecute firms that did not disclose or settle contraventions.

Unhappy black-owned companies will not settle for the R1.46bn fines handed down by the Competition Commission, and later confirmed by the Competition Tribunal, as well as damages claims to be lodged by aggrieved parties.

They also want the government to blacklist the errant companies.

Fifteen companies were fined for colluding in some of the country’s biggest infrastructure projects, including the Gauteng Freeway Improvement Project, which brought motorists e-tolls, and the building of 2010 World Cup stadiums, among others.

The National Black Contractors and Allied Trades Forum’s Sam Moleshiwa said the forum had already briefed its legal team and would determine the extent of the damages at its council meeting on April 26.

“The country would have been better off without their collusion. Our progress has been impeded,” said Moleshiwa, adding that collusion breeds corruption.

He said they wanted the Construction Industry Development Board (CIDB) and National Treasury to blacklist the construction cartel firms, and were looking for pro bono legal representatives to take on the government and the CIDB to force them to bar these companies.

Moleshiwa said some of the forum’s members in Limpopo were blacklisted by the National Treasury after part of the provincial government was placed under administration.

CIDB chief executive Mzwandile Sokupa told The Sunday Independent that collusion was a violation of the board’s codes.

“CIDB is taking action, and an investigation is under way,” he said.

Sokupa undertook to treat the companies fairly, but decisively.

 

Black Business Council secretary-general, Gregory Mofokeng, said they would not be instructing the CIDB, but would merely request it to apply its regulations.

Mofokeng said: “Our members missed out on opportunities because of the collusion. We want restitution, which can take many forms.”

According to Mofokeng, as things stand, government has no justification not to award contracts to companies that admitted to collusion, because they have not been blacklisted or deregistered by the CIDB.

 

DA economic development spokesman, Sej Motau, said the rule of law must be applied.

 

This week, the economic development department would not quantify its damages claims against the bid-rigging construction companies, and whether it was considering blacklisting them permanently or temporarily or pursue criminal charges against the individuals and firms involved.

Norman Milne and Webster Mfebe, president and chief executive respectively of the SA Forum of Civil Engineering Contractors, which represents established and emerging construction companies, did not respond to requests for comment.

 

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Sunday Independent



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