Nearly two months after the Competition Commission exposed corruption on a grand scale in the construction industry, the Construction Industry Development Board (CIDB) still has not started to investigate which companies could be barred from public sector tenders.
At least one, Group Five, has major contracts with the city.
In June, the Competition Commission reached settlement agreements and fined 15 of the country’s top construction and engineering firms nearly R1.5 billion, including all the major listed companies in the sector, after they admitted to widespread tender collusion, price fixing and bid rigging.
The commission’s investigation, launched more than two years ago, lifted the lid on collusion on World Cup stadium tenders, including the R4.5bn Cape Town Stadium, and several other contracts.
The board is compelled by law to investigate the companies, and in terms of its code of conduct, companies guilty of collusion and bid-rigging could be removed from its grading system database. Companies require a CIDB grading to bid for public sector work.
It also has the power to impose fines or deregister companies.
However, the board has not yet started its investigation.
Kotli Molise, spokeswoman for the CIDB, said the board was still trying to get copies of the investigation reports from the Competition Commission before appointing its own investigating committee.
She said even though the commission found these companies guilty of collusion and prohibited practices, the CIDB had to go through the process of doing its own investigation before deciding which firms to penalise.
Group Five, which disclosed 25 rigged projects to the commission, including the stadium, has three contracts worth more than R190 million with the city – the R85.5m (excluding VAT) Ndabeni Master Plan (awarded this year), R7m for the MyCiTi phase 1B and N2 Express Freeway and R87m for MyCiTi freeway stops.
The city is considering claiming damages from the companies which colluded on the construction of the stadium.
Mayco member for finance Ian Neilson said last week the city could not say anything as an investigation was in progress.
Meanwhile UCT is also still deciding whether it will claim damages from the companies which colluded on the construction of the R87m UCT women’s residence.
In order to ensure that Group Five won the contract, Stefanutti and Grinaker LTA submitted cover prices while Group Five paid the two companies a losers’ fee of R500 000.
UCT spokeswoman Pat Lucas said the university was still waiting for further information from the Competition Commission and could not comment at this stage. - Cape Times