Construction sector cartel case nears completion

© Alexey Klementiev – 123RF.com

The Competition Commission began probing the construction sector in 2009 for collusive practices that implicated big players including Aveng, Murray & Roberts, Basil Read and WBHO.

In 2013, the four were among 15 firms that paid administrative penalties amounting to R1.4bn through the construction fast-track settlement process. Delatoy did not settle with the commission, which is seeking the maximum penalty against the company.

Cycad Pipelines, also involved in the Limpopo project, has paid a R3.3m settlement penalty.

The commission wants parent firm Delatoy Group to fork out 10% of its entities' turnover, or that Delatoy Investments be fined a 10% administrative penalty, Competition Commission spokesman Itumeleng Lesofe said yesterday.

The probe into Delatoy's involvement in the construction cartel arose when implicated parties in the initial investigation started pointing fingers and singing to authorities during hearings.

The commission alleges Delatoy Investments proposed that Cycad Pipelines and Phambili Pipelines, now owned by Basil Read, enter an agreement in February 2008 whereby the firms submit an inflated bid for the project to cover the unsuccessful bidders' loser's fees.

The project, whose tender was closed, involved laying 30.4km of pipeline. Cycad won the tender and is said to have been contacted by Delatoy to pay the loser's fee. The money was disguised as payments for plant hire. Delatoy then traded as Shearwater Group Holdings, changing its name in 2009.

Source: Business Day