THE directorate for priority crimes — known as the Hawks — is investigating tender irregularities in large construction projects, but on Monday declined to say which companies were involved or how much money was at stake.
Construction companies were tight-lipped on Monday about the probes into alleged collusion in major infrastructure projects, while their shares tumbled following reports at the weekend that they were being investigated by the Hawks.
Stefanutti Stocks shares dropped by up to 6% in trading on Monday, WBHO closed 5.8% down and Aveng declined by 4%.
Hawks spokesman Paul Ramaloko said on Monday that “several tenders” were involved. The Hawks would only make an announcement after their investigation had “matured”, he said.
The four biggest construction companies on Monday cited confidentiality agreements with the Competition Commission when asked about the Hawks probe. They all committed to ethical behaviour in the future.
Competition Commission advocacy and stakeholder relations head Trudi Makhaya emphasised on Monday that the Hawks’ investigation into the construction industry was a completely separate process from the commission’s probe that began in February 2011.
The commission instituted a “fast-track settlement process” for companies after its investigation into bid-rigging and cartel activities over the 2010 Soccer World Cup stadiums and the Gauteng Freeway Improvement Project. More than 20 companies have confessed to irregular conduct in more than 300 projects and tenders worth close to R30bn.
Ms Makhaya said if the commission could not reach a settlement agreement with the companies, the matter would be referred for adjudication to the Competition Tribunal, which can levy an administrative penalty of a maximum of 10% of a guilty company’s turnover.
She said the commission’s process would be separate from the criminal process.
The South African Federation of Civil Engineering Contractors on Monday urged its members to fully investigate and monitor all their operations with regard to competition law.
“Since the commencement of the Competition Commission’s investigation in 2011, the federation has repeatedly encouraged its members to co-operate fully with the relevant authorities,” executive director Webster Mfebe said.
The federation said the full disclosure by members involved in anticompetitive behaviour, on which the commission was insisting, was an opportunity to clean up the industry “for once and for all”.
“Members are advised to run awareness programmes to ensure that employees, stakeholders, and subcontractors do not breach competition legislation,” Mr Mfebe said.
“Where isolated irregularities are found, members should immediately engage with the Competition Commission and other relevant authorities,” he said.