Babalo Ndenze
Political Bureau
LAWS are to be tightened to enable the government to go after the bosses of companies involved in price-fixing and collusion, said Economic Development Minister Ebrahim Patel.
The clandestine activities of big industry cartels had been “blown wide open” and the government would no longer be “held hostage” by them, he said yesterday.
The measures would go a long way towards preventing widespread fraud and price-fixing as the country prepared to spend a whopping R1.5 trillion on infrastructure projects, creating 250 000 jobs, over the next five years or so.
“We can’t be held hostage by these cartels and price-fixers. So what have we done? We’ve blown open the cartel, we’ve required every company not just to settle with us, but to disclose every meeting that they have attended, who was present, where the meeting was held, what the nature of the deal is.”
Patel said competition authorities under his department’s jurisdiction “have really gone after the cartels and monopolies”.
“Six, seven years ago there was almost silence about it. Today the big headlines are about Telkom’s abusive market dominance, the action against Sasol in polypropylene, the construction (cartel) of course, and the fertiliser cartel break-up.”
Penalties and mandatory fines imposed on companies had increased by 900 percent over the past five years because his ministry had been able to “give much greater stewardship and leadership to the competition authorities”.
Patel said the government had gained greater insight into how the cartels operated.
“That was a first step in breaking up the cartels. The second step was punitive fines, (for which) these directors… have to account to the shareholders. The third step is we are going to look at criminalisation provisions in our legislation to toughen up the penalties and the remedies that the competition authorities can bring against cartels. I will be coming to Parliament next year with some proposed changes to the legislation to strengthen that.”
The authorities had acted “so decisively” against construction industry cartels involved in World Cup contracts because the government knew it would be spending R1.5 trillion on infrastructure.
The government had invested R1.1 trillion in infrastructure over the past five years, “the biggest sum in real terms in the past 50 years”.
“The challenge we’ve had of not having spending and of plans sitting on a table, and not seeing the light of day changed quite dramatically over the five years.”
Energy would be the new administration’s big drive “if we look beyond the day-to-day delays in Medupi or the challenges in Kusile”.
“What we will have completed by the end of this administration is roughly 15 000 additional megawatts of energy. That’s equivalent to building eight new Koeberg power stations. It’s like bringing eight power stations on stream in the next five years. That’s how ambitious it is.”