Roy Cokayne
COMPETITION authorities have bust another construction company and fined the group R3.7 million. Giuricich Coastal Projects was fined R149 429.31 in terms of a settlement agreement reached with the Competition Commission.
The fine was imposed as Giuricich colluded with Grinaker-LTA, a subsidiary of JSE-listed Aveng, on a tender for the construction of a parking garage in uMhlanga in Durban for Unilever South Africa.
The Competition Tribunal confirmed the settlement agreement this week.
In another matter, Giuricich Bros Construction reached a settlement agreement with the commission in terms of which it agreed to pay a fine of R3.55m for transgressing the Competition Act in August 2005 on the Millwood Village Residential Project in Bryanston in Johannesburg. Giuricich Bros reached an agreement with Vlaming on a cover price for the project.
Going back to the Unilever matter, Grinaker-LTA in May 2009 applied for and was granted conditional immunity in terms of the commission’s corporate leniency policy for transgressing the act on this project.
The fine represents 1.25 percent of Giuricich’s annual turnover in the general building sub-sector of the construction industry for its 2010 financial year. This was one of the legacy cases in the construction industry where the investigation had been completed and the case already referred to the tribunal before the commission launched its construction fast-track settlement process.
The commission has adopted a general approach of imposing a penalty of 1.25 percent, for each project, of the firm’s turnover for the 2010 financial year for settlement of legacy cases.
A penalty of 1 percent a project was imposed on construction companies who settled cases in terms of the fast-track settlement process. The fast-track settlement process resulted in the commission concluding settlement agreements with 15 companies involving the payment of penalties collectively worth R1.46 billion for bid rigging and collusive tendering infringements.
The commission’s investigation of this project revealed that MLC Quantity Surveyors, acting on behalf of Unilever South Africa, approached Grinaker-LTA in March 2008 to tender for the construction of the parking lot garage to accommodate 320 vehicles in a four-storey building.
The value of the project was estimated at R25m.
In April 2008, Giuricich and Grinaker-LTA discussed and agreed on a cover price arrangement prior to submitting their tenders for the project.
The commission’s probe found the collusive agreement was reached through Grinaker-LTA requesting and receiving a cover price from Giuricich to enable Grinaker-LTA to show an expression of interest to MLC Quantity Surveyors.
The bid by Grinaker-LTA was therefore not competitive with the bid submitted by Giuricich.
Other firms that were invited to tender for the project and submitted bids were Stefanutti & Bressan, Construction ID, Ross Construction and Stocks Building KZN. The tender was awarded to Stefanutti Stocks Holdings.