JOHANNESBURG - Plasser South Africa has been fined R8.4 million for engaging in market division and collusive tendering on Transnet rail maintenance tenders with Lennings DEC Rail Service, a subsidiary of listed construction group Aveng.
The Competition Tribunal yesterday confirmed a consent agreement entered into between Plasser SA and the Competition Commission.
Plasser SA is the local partner and agent for Austrian-based Plasser & Theurer machinery.
Tshepiso Madisha, appearing for the commission, said an investigation launched by the commission in February 2014 found Aveng, through Lennings, agreed with Plasser during 2004 to allocate Transnet tenders to each other and to tender collusively for the allocated tender.
She said the parties specifically agreed to allocate and tender collusively for the Transnet Dynamic Stabiliser Continuous Action Tampers (Dynacat) tender.
It was agreed that the first phase of this tender would be awarded to Plasser and the second phase to Lennings.
Madisha added that to ensure the allocation happened as agreed, Lennings deliberately submitted a cover bid that did not meet the Transnet specifications by bidding using a different machine to the required Dynacat machine.
For the second phase of the tender, Plasser provided Lennings with a cover price to ensure that Lennings’ bid was acceptable and also agreed to lease a Dynacat machine to Lennings for this project, she said.
Madisha said the first phase of the tender was awarded in July 2004 to Plasser subsidiary Railway Mechanised Maintenance Company (Ramco) and the second in August 2004 to Lennings.
She said the conduct by the parties might have started in 1997 and continued until 2004 and the Dynacat tender.
Madisha said the penalty amount represented 3percent of Plasser SA’s turnover in its 2016 financial year and would be paid in three instalments.
Martin Versfeld, the legal representative for Plasser SA, said Lennings and Plasser SA had dominated the market for many years and tenders to a large extent were allocated by Transnet to ensure the survival of both firms.
He said the original collusive arrangement was concluded 14 years ago by the then Plasser managing director. “The current MD has the unhappy position, if truth be told, where he has inherited the situation.”