Johannesburg - Freyssinet Posten, an equal joint venture between Murray & Roberts (M&R) and Soletanche Freyssinet Group of France until about November 2011, has been fined about R4.7 million after admitting to price fixing, market allocation and collusive tendering on more than 60 projects.
The projects affected by the contraventions of the Competition Act included bridges and viaducts to the Gautrain rapid rail project, the Sandown Isle vehicle showrooms and offices, Melrose Arch Piazza, Carnival City and the Wonderboom Junction and Norwood shopping centres.
The Competition Tribunal confirmed the consent agreement reached between the Competition Commission and M&R and Freyssinet at a hearing yesterday. In terms of the agreement, M&R has agreed to pay a fine of R1.35m and Freyssinet a fine of R3.35m.
Split fine
The fine represented 7 percent of Freyssinet’s turnover in its 2011 financial year.
Rudolph Labuschagne, appearing for M&R, explained that the fine was split in terms of an apportionment arrangement agreed when M&R sold its 50 percent interest in Freyssinet in November 2011.
Layne Quilliam, appearing for the commission, said the consent agreement followed an investigation by the commission that found that between June 2006 and December 2008 Freyssinet, Tsala-RMS and Amsteele Systems agreed to share available tenders between them in a roughly equal manner.
Quilliam added that to facilitate this collusive agreement, they had also agreed in certain instances on cover prices so that whichever company was allocated that tender, was awarded that tender.
He said there were also certain discussions and agreements on mark-ups and profit margins on certain tenders to minimise the risk that a tender would not be awarded to the allocated cartellist or lost to substitute or products such as reinforcing steel bar.
Quilliam said the commission also found that Freyssinet, Amsteele, Tsala-RMS and Steelforce agreed under the umbrella of the industry association SA Post Tensioning Association (Sapta) on certain contractual price adjustment formulas to be applied to their contracts. These formulas were applied to lengthy contacts to take account of input cost price escalations.
Final price
Quilliam said the commission’s findings were that this was effectively an agreement on a component of a final price to be paid by a customer.
He said the respondents had in terms of the consent agreement admitted to contravening the Competition Act.
Quilliam said Sapta had agreed to also enter into a consent agreement with the commission once all its members had concluded their cases.
He said that this would be the end of the case, because Tsala-RMS was the leniency applicant and Steelforce Systems was in the process of being liquidated when the commission contacted the company about a year ago.
Amsteele in February last year agreed to pay a fine of R2.8m, which represented 7 percent of the company’s turnover from the manufacture and supply of post tensioning steel in its financial year to March 2011.
BUSINESS REPORT