The Competition Tribunal finally put to rest an eight-year-old saga of a R240 million tender at power utility Eskom in which four firms and three joint ventures were alleged to have colluded for the supply, transportation, delivery, installation and dismantling of scaffolding and thermal insulation at Eskom’s 15 coal-fired power stations.
The power utility has been on a drive to clear up its house with overinflated and dodgy contacts as it also seeks to tighten its strained finances.
The respondents to this complaint were SGB-Cape, a division of Waco International; the three firms with which SGB-Cape partnered - Tedoc Industries, Superfecta Trading 159 and Mtsweni Corrosion Control - and the three JVs between them: namely Tedoc SGB-Cape JV, Superfecta SGB-Cape JV and Mtsweni SGB-Cape JV.
The Tribunal found that SGB-Cape, as the controlling mind, on behalf of all the JVs could not compete with itself and further that because the JVs would not exist in the absence of this tender, they could not compete with each other or with SGB-Cape, absent the tender.
The Tribunal found that the facts of the case did not support the Competition Commission’s argument that by submitting four separate tenders, SGB-Cape and the three JV’s were in a “horizontal relationship” and thus competitors.
The Tribunal ruled that the Commission had failed to prove that the firms were competitors.
The tender in contention was issued in March 2015.
Eskom lodged a complaint against SGB-Cape with the Commission for investigation in March 2016 alleging that Waco director John Falconer was responsible for signing and preparing all four bids.
It alleged the technical, financial and other requirements in the bids were identical, and the terms and conditions of the joint ventures were identical and developed by the same attorney
In addition, Waco’s bid price was the lowest, but two of the joint ventures submitted the same prices and the rate of differences between the bids of Waco and the joint ventures was consistent.
Eskom later withdrew its complaint.
The Commission, however, continued its investigation and subsequently initiated its own complaint against Tedoc, Superfecta and Mtsweni. The Commission later referred the complaint to the Tribunal for adjudication. The Commission alleged that the firms had engaged in collusive tendering through price fixing.
In 2018 an application for dismissal of the matter was refused by the Tribunal.