The Competition Tribunal is on Thursday due to confirm an immunity agreement JSE-listed construction group Aveng struck with the Competition Commission, but first wants more information before making a ruling.
This will most likely see the firm avoid paying a multimillionrand administrative penalty. Crucially, Aveng needs the tribunal’s decision to obtain protection against possible civil litigation from state-owned entities for which it has done work.
“The agreement would give Aveng immunity from an administrative penalty,” the tribunal confirmed on Wednesday.
The commission has been cracking down on collusion across many sectors, with Economic Development Minister Ebrahim Patel increasingly taking a hard line on companies.
Several state entities including the City of Cape Town, have threatened civil action against construction companies accused of collusion.
Seven of SA’s major construction and engineering companies agreed last week to participate in a R1.5bn “voluntary” settlement agreement to allay competition penalties and speed up transformation in the sector.
Murray & Roberts, Wilson Bayly Holmes-Ovcon, Group Five, Stefanutti Stocks, Raubex, Basil Read and Aveng agreed to pay annual dues over 12 years into a trust governed by trustees appointed by the government, the construction companies and the South African Forum of Civil Engineering Contractors.
The R1.5bn agreement with the state is in addition to the R1.46bn already levied on 15 construction firms for collusion.
Aveng spokeswoman Sorita van Tonder said on Wednesday: “Aveng confirms it has signed a consent agreement with the Competition Commission, which relates to the historical projects for which it was the immunity applicant in 2013.
“No relief is sought against Aveng and the company will not incur penalties. Aveng has processes ... to ensure that this type of behaviour is never again associated with the Aveng brand.”
The tribunal said Aveng was the first company to apply for immunity when the commission launched its fast-track project in February 2011 and had concluded an agreement with the commission over various projects.
The projects included water works, a mining crushing project, processing plant project and export railway line, a block of flats in Mossel Bay, rehabilitation of a national road in the Eastern Cape and Transnet railway maintenance tenders.
“The fast-track process by the commission gave companies in the construction industry an opportunity to settle with the commission on favourable terms,” the tribunal said.
“In return for conditional immunity, Aveng disclosed its participation in collusive tendering in a number of projects between 2004 and 2007.
“The Competition Commission now confirms that Aveng has complied with the requirements set out in the leniency policy,” it said.
Group Five was also among the first construction companies to approach the Competition Commission.
source: Business Day