Thursday, July 7, 2022

Companies accused of price fixing collusion in RSA won tenders collectively in Botswana

Evidence has emerged suggesting that construction companies may have colluded over the years to fix prices for Botswana government funded projects.

The Competition Authority had, by press time, not responded to enquiries by this newspaper following growing media reports in South Africa alleging price fixing of state funded construction projects by several big companies many with a local presence.

According to the Mail & Guardian newspaper, there have been affidavits deposed with the country’s National Prosecuting Authority which finger senior executives and managers at South Africa’s biggest construction companies, including Murray & Roberts, Group Five, Basil Read, Aveng, WBHO and Stefanutti Stocks, as well as a number of smaller players for collusion.

The newspaper further reported that the leaking of a set of affidavits handed over in 2011 by senior staff members of one construction company to the country’s National Prosecuting Authority detailed the extent of the collusion and cartel activity by construction companies.

The newspaper said the affidavits  painted a picture in which most senior managers and executives in all the major construction firms could face potential jail time for their involvement in activities that can be defined as fraud, corruption or racketeering.

The Sunday Standard can reveal that at least eight companies named in the South African media and alleged to be under investigation, have over the years been collectively shortlisted for tenders by the government of Botswana but they have never been accused of collusion at least until now.

In 2005, for instance, the Ministry of Works and Transport, through tender number TB9/3/149/2001-2002 approval by the Public Procurement and Asset Disposal Board, shortlisted eight of the companies under investigation in South Africa for the construction of the multi-million pula Institute of Health Sciences at Serowe and Molepolole.

The Serowe project was allocated to WBHO, Grinaker- LTA Stocks & Stocks, Murray Roberts and Group Five. For the Molepolole bearing the same tender numberTB9/3/149/2001-2002, again Murray & Roberts was given the tender along with Basil Read Construction Botswana and Concor.

Murray & Roberts Botswana, however, maintains that it has never been involved in collusive price fixing.

The company’s Group Communications Executive, Ed Jardim, would not comment on whether the issues raised in South Africa may also arise here.

“Unfortunately, we are subject to a confidentiality agreement with the South African Competition Commission ÔÇô thus we cannot comment further on this issue. The current press articles refer to existing investigations by the Competition Commission not the Hawks. We have been transparent,” he said.

Asked if his company would welcome a similar probe in Botswana by the country’s Competition Authority should the need arise, Jardim said: “We have no knowledge of any recent or current collusive activity and are committed to compliance with the South African Competition Act.”

He said that Murray & Roberts supports free and competitive markets in every jurisdiction in which the company operates and has adopted a position of “zero tolerance towards anti-competitive behaviour and collusive misconduct.”

“Indeed, Murray & Roberts was, as far as we know, the first company in the sector to bring conduct of this nature to the attention of the Competition Commission (“Commission”). Murray & Roberts has engaged in extensive internal investigations, with the assistance of independent, external legal advisers, to uncover the conduct. We are confident that any historical conduct of this nature has been rooted out and that Murray & Roberts is a very different company today,” the company said in a statement.

The company’s recent big project was the P200 million civil works at the Jwaneng Cut 8 project.


Read this week's paper