Wilson Bayly Holmes-Ovcon (WBHO) has admitted to all sorts of anti-competitive practices across 10 different projects and - because it rolled over and said sorry - gets away without being penalised.
The listed construction company’s admission of guilt gets it off the hook with the competition authorities, and brings to a close two of three cases of collusion in the construction sector.
That’s right - three cases. In fact, this whole sorry saga dates all the way back to 2009 when the Competition Commission started investigating the sector.
That probe led it to believe that there was wholesale collusion in the sector, collusion that was so deeply entrenched and widespread that it couldn’t even bring all the cases at the same time, and spent six years looking into the anti-competitive behaviour.
It’s one of those complicated issues where - unless you’ve been following it from the start - you’d need an organogram the size of a billboard to map it all out. It’s mind-boggling.
What that tells me is that this was business as usual for those in the construction sector - and that includes some pretty big names; names that we all recognise as household brands.
Basil Read, Murray & Roberts, Stefanutti... the list seems endless and, in fact, seems to span all the big guys in construction. Goodness only knows what the small fry are up to.
Read also: WBHO opens itself up to civil action suit
In 2013, the big boys were fined a cumulative R1.46 billion for their role in behaviour such as collusive tendering and splitting the market up amongst themselves.
Many of the projects named under the probe were commissioned by the private sector, and those companies will have seen their costs escalate out of control because of what the building companies did.
However, several of the projects were paid for by us - the taxpayers - and include the construction of several roads, Soccer World Cup stadiums and at least one dam.
We all know the government has a reputation for never finishing a project on time - I hate to think how long the M1 will be a total mess - and for huge cost overruns.
Who pays?
The question is, how much of this can be attributed to collusion? And how do these companies even get away with it? Aren’t there, I don’t know, project managers who keep an eye on this sort of thing?
Apparently not - and taxpayers pay the price. Sure, the companies paid a fine. You know where that goes?
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Not to the competition authorities so they can clamp down further on such practices.
Not back to taxpayers who have been hurt - although the bread scandal of a few years ago is a better example of consumers being screwed and never getting any recourse.
Nope, it goes to the National Treasury and becomes part of the pie that Finance Minister Pravin Gordhan divvies up each February.
Sure, there is recourse for those who have been wronged. Sanral, for example, is suing several companies after phase one of the probe was wrapped up.
WBHO has opened itself up to a civil suit.
But you and I? Can we sue? Would we sue? Should we sue?
If Sanral wins - which is highly likely - that money doesn’t come out of our fuel levy. It doesn’t come out of the tax we pay. It doesn’t give us any relief. It’s pretty meaningless for the man in the street.
I think competition law needs to be rethought so that the man in the street gets some benefit out of the penalty. How about making the construction companies build homes for the homeless to the value of the fine?
There are kinks in this idea, but it is a darn sight better than the current solution.
* Nicola Mawson is the online editor of Business Report. Follow her on Twitter @NicolaMawson or Business Report @busrep.
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