Roy Cokayne
CONSTRUCTION firms Power Construction West Cape and Haw & Inglis were allegedly involved in collusion and bid-rigging on a tender issued by the SA National Roads Agency (Sanral) for periodic maintenance of the N1 from Touws River to Laingsburg.
This has emerged in the notice issued by the Competition Commission in referring the case to the Competition Tribunal for prosecution after Power Construction decided against settling the case.
The commission is seeking a tribunal order making Power Construction liable for the payment of an administrative penalty equal to 10 percent of its turnover or further and/or alternative relief.
Mehluli Nxumalo, an inspector in the cartels division at the commission, said in an affidavit Power Construction in April 2011 addressed a letter to the commission seeking to settle its collusive conduct in relation to the maintenance contract for the N1 from Touws River to Laingsburg, but subsequently elected not to settle this case.
He said the commission was not seeking any penalty against Haw & Inglis.
Haw & Inglis
The tribunal in July last year confirmed the provisional consent settlement agreements reached between the commission and a number of construction firms in terms of a fast-track settlement process, including a R45.3 million fine agreed between the commission and Haw & Inglis for six prohibited practices.
The N1 from Touws River to Laingsburg tender was not listed in Haw & Inglis’ settlement agreement but the firm was the first to apply for two unidentified non-prescribed prohibited practices and granted conditional immunity.
Nxumalo said the commission’s probe found Power Construction had entered into a collusive agreement with Haw & Inglis on this project.
Kevin Konkol, who at the time was employed as the contracts director of Haw & Inglis, attended the briefing session for the project but realised the majority of firms represented were unlikely to be considered for the tender because they did not have the required Construction Industry Development Board grading.
Nxumalo said Konkol discovered when preparing Haw & Inglis’ tender documentation that various suppliers he approached for quotations had not been approached by any other firms for quotations related to this contract and was concerned Haw & Inglis would be the only viable bidder for the contract, which would result in Sanral cancelling the tender.
Konkol contracted John Beddingham, who at the time was employed as a chief estimator with Power Construction, to ask Power Construction West Cape to submit a cover price for the contract to avoid the risk of Sanral cancelling it because of a lack of viable bidders. Beddingham agreed to this arrangement and Konkol indicated the cover price should be above R99m.
Despite the agreement, Beddingham indicated it would be difficult for him to compile the required tender documentation in time.
This resulted in Konkol providing him with a bill of quantities document to assist him in compiling the tender documents, including the cover price, before the closing date for the submission of tenders.
Nxumalo said the submission of the bill of quantities document and the agreement on a suitable cover price between Konkol and Beddingham amounted to Haw & Inglis, which wished to win the tender, having given a cover price to Power Construction West Cape, which did not wish to win the tender.
In line with the terms of the collusive agreement, Power Construction submitted its tender for the N1 contract with a tender price of R99.98m and Haw & Inglis submitted its tender price of R98.5m.
The tender was awarded to Haw & Inglis in July 2006. The project was completed in January 2008.