Johannesburg - It was a myth that construction industry capacity would disappear if the firms who were involved in collusion and bid-rigging were banned from doing public sector work, Gregory Mofokeng, the general secretary for the built environment at the Black Business Council (BBC), said yesterday.
“When one company is banned from doing business with government… that capacity moves to a company that has the opportunity to do business with the government,” Mofokeng said. “It’s not entirely true that that capacity disappears. The capacity and skills remain in the industry even if they move to a different company name.”
His views are in contrast to those expressed by government ministers and major construction companies.
When the settlement agreements between the construction firms and the Competition Commission were announced last year, Economic Development Minister Ebrahim Patel emphasised the government was seeking to ensure an appropriate balance between the actions that were necessary to stamp out collusion and price-fixing, while still ensuring the country had the necessary construction and project management capacity for both state and private sector infrastructure programmes.
Public Works Minister Thulas Nxesi told a Master Builders South Africa annual congress last year that the findings of the Competition Commission investigation into collusion and bid-rigging in the construction sector left the government with a dilemma.
“Wrongdoers need to be held to account no matter how big they are but we [the government] are also dependent on what is a vital sector of the economy,” Nxesi said then.
Major construction companies previously said that banning them from government work was unrealistic and unworkable. - Business Report