The City of Cape Town and Western Cape Premier Helen Zille are demanding answers after the Competition Commission announced that Cape Town Stadium was one of a host of construction projects being investigated for alleged bid rigging.
The commission said yesterday it was investigating 65 cases involving 70 construction projects worth about R29-billion after
Now city authorities and Zille say they want to know whether Cape Town’s ratepayers overpaid for the stadium.
Referring to a number of major projects, including the stadium, Durban’s Moses Mabhida Stadium and the Gautrain, the commission alleged that “major firms in the (construction) sector, for example, have held meetings to allocate tenders and police each other’s behaviour through a structure referred to as The Party”.
The commission called for construction companies to apply for “fast-track settlement” on condition they provided “complete and truthful disclosure of information regarding collusion”.
“In addition the firm must undertake to co-operate and cease anti-competitive conduct. Upon complying with the requirements, the commission will settle with participating firms with a reduced administrative penalty compared to the penalty if each transgression were to be prosecuted separately.”
Zille, who was Cape Town’s mayor when the contract for the stadium’s construction was awarded, said today: “The people who led the negotiations with the winning consortium were the best people we had, led by Mike Marsden.
“Clearly if there is any suggestion of collusion, one wants to get to the bottom of it and get to the facts. In a situation of high demand, limited supply and great time pressure, it is particularly important to prevent collusion among major bidders - who should be competitors in order to ensure the best value for money,” Zille said.
Marsden confirmed to the Cape Argus today that city authorities shared precisely the commission’s concerns, and had been working with it “for some years now”.
“We were concerned about the escalation in prices. The original contracted price of the stadium was around R2,9bn, and the final completion price will be around R4,3bn.
“We were also concerned about certain limited responses to tenders, and although we had no evidence, we had concerns. That remains the situation today - we have no evidence but we have concerns - and nationally there was allegedly a replication of this at other stadiums.
“We have made submissions to the commission, but we have not received any formal response,” Marsden said.
The commission said in its statement, published on the internet: “Subsidiaries of several major construction companies are involved in these cartels.
“In addition, 150 marker applications (indicating an intention to apply for corporate leniency), some relating to more than one project, have been received by the commission. Most of these corporate leniency applications were submitted by Group Five, which has been co-operating with the commission since 2009. In addition, applications were received from Grinaker-LTA and Murray & Roberts, who have committed to co-operate.”
Murray & Roberts was the joint winning bidder who built the Cape Town Stadium, along with Wilson Bayly Holmes-Ovcon (WBHO).
M&R and WBHO were not available for comment this morning.
The commission said 65 “bid rigging cases” were under the microscope.
“Further, markets for construction products such as long steel, mining roof bolts, concrete pipes, plastic pipes, wiremesh, reinforcing steelbar installation and pilings construction have also been investigated.”
- Cape Argus
The commission said yesterday it was investigating 65 cases involving 70 construction projects worth about R29-billion after
“uncovering widespread anti-competitive conduct through various arrangements” within the industry.
The Cape Town Stadium will ultimately cost R4,3bn, although the original price was R2,9bn.
Now city authorities and Zille say they want to know whether Cape Town’s ratepayers overpaid for the stadium.
Referring to a number of major projects, including the stadium, Durban’s Moses Mabhida Stadium and the Gautrain, the commission alleged that “major firms in the (construction) sector, for example, have held meetings to allocate tenders and police each other’s behaviour through a structure referred to as The Party”.
The commission called for construction companies to apply for “fast-track settlement” on condition they provided “complete and truthful disclosure of information regarding collusion”.
“In addition the firm must undertake to co-operate and cease anti-competitive conduct. Upon complying with the requirements, the commission will settle with participating firms with a reduced administrative penalty compared to the penalty if each transgression were to be prosecuted separately.”
Zille, who was Cape Town’s mayor when the contract for the stadium’s construction was awarded, said today: “The people who led the negotiations with the winning consortium were the best people we had, led by Mike Marsden.
“Clearly if there is any suggestion of collusion, one wants to get to the bottom of it and get to the facts. In a situation of high demand, limited supply and great time pressure, it is particularly important to prevent collusion among major bidders - who should be competitors in order to ensure the best value for money,” Zille said.
Marsden confirmed to the Cape Argus today that city authorities shared precisely the commission’s concerns, and had been working with it “for some years now”.
“We were concerned about the escalation in prices. The original contracted price of the stadium was around R2,9bn, and the final completion price will be around R4,3bn.
“We were also concerned about certain limited responses to tenders, and although we had no evidence, we had concerns. That remains the situation today - we have no evidence but we have concerns - and nationally there was allegedly a replication of this at other stadiums.
“We have made submissions to the commission, but we have not received any formal response,” Marsden said.
The commission said in its statement, published on the internet: “Subsidiaries of several major construction companies are involved in these cartels.
“In addition, 150 marker applications (indicating an intention to apply for corporate leniency), some relating to more than one project, have been received by the commission. Most of these corporate leniency applications were submitted by Group Five, which has been co-operating with the commission since 2009. In addition, applications were received from Grinaker-LTA and Murray & Roberts, who have committed to co-operate.”
Murray & Roberts was the joint winning bidder who built the Cape Town Stadium, along with Wilson Bayly Holmes-Ovcon (WBHO).
M&R and WBHO were not available for comment this morning.
The commission said 65 “bid rigging cases” were under the microscope.
“Further, markets for construction products such as long steel, mining roof bolts, concrete pipes, plastic pipes, wiremesh, reinforcing steelbar installation and pilings construction have also been investigated.”
- Cape Argus
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