Tribunal goes easy on struggling Civcon

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Civcon Construction settled with the Competition Commission on a fine of less than 1% of its 2013 turnover — amounting to a fine of R798,385.98 — for colluding with Infraset, a division of Aveng (Africa), on the South Deep Mine project of September 2006. Civcon Construction settled with the Competition Commission on a fine of less than 1% of its 2013 turnover — amounting to a fine of R798,385.98 — for colluding with Infraset, a division of Aveng (Africa), on the South Deep Mine project of September 2006.

Civcon Construction, a mining and construction company implicated in the pre-World Cup construction cartel that has since then fallen on hard times, received a sympathetic ear from the Competition Commission, which imposed a “double-discounted” fine.

The company settled with the commission on a fine of less than 1% of its 2013 turnover — amounting to a fine of R798,385.98 — for colluding with Infraset, a division of Aveng (Africa), on the South Deep Mine project of September 2006.

Civcon was one of 25 companies cited for collusive tendering by firms that came forward during the commission’s fast-track settlement process in 2011. Civcon’s involvement in the cover-pricing incident was given away by Aveng. The latter paid a penalty of R306.5m for its own involvement in the bidrigging contraventions.

Last week, the commission referred for prosecution before the Competition Tribunal its first case of the companies that participated in bid rigging for major construction work ahead of the 2010 Soccer World Cup.

The case relates to meetings between the different players in the construction industry during and around 2006, when Group Five, Murray & Roberts, Stefanutti Stocks, WBHO and Basil Read allegedly allocated the Mbombela, Peter Mokaba, Moses Mabhida, Soccer City, Nelson Mandela Bay and Green Point stadiums tenders among themselves and exchanged cover prices.

Murray & Roberts was later granted leniency after coming clean about the meetings.

Yesterday, the tribunal confirmed the commission’s settlement agreement with Civcon. The commission had noted that in September 2006 Infraset agreed with Civcon to submit an agreed cover price for a bid to supply precast concrete brattice wall panels to Gold Fields’ South Deep Mine. Infraset had agreed to pay Civcon a loser’s fee of about R500,000 if Infraset won the tender.

“Civcon unexpectedly won the bid but in the spirit of the collusive arrangement, Civcon paid Infraset a loser’s fee of R171,000 as compensation for not winning the bid,” the commission said yesterday.

Civcon was undergoing a business rescue when it heard about the commission’s investigations. In March management indicated it was willing to settle the matter. Civcon was supposed to pay 2% of its 2013 turnover but due to its “fragile financial position” the commission further discounted the fine.


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