Mar 07, 2008
Contractor promises proactive engagement with competition body in construction sector probeBack
© Reuse this
Speaking last week CEO Brian Bruce indicated that it was dealing with requests for information from the Competition Commission and that it would not be a "defensive player" in the unfolding processes.
He refused to be drawn on whether this engagement could result in an application for corporate leniency, saying only that "we are going to be proactive".
"We are not hiding under a tree, we are not going to deny issues, and we will deal with issues as they arise," Bruce said.
The company stressed, though, that "it would be incorrect to assume that corrupt practices are endemic to the industry and its associates".
Late last year, it emerged that the Competition Commission had set up a sizable multidisciplinary team to review the construction-materials and -services sector as a precursor to a full-scale investigation into possible anticompetitive practices in the industry.
Major areas of concern identified related to consistently high rates of price increases for many products, such as bricks, aggregates, cement and reinforcing steel; high levels of concentration and barriers to entry in the construction-materials market; and significant transport costs, which lowered the threat of import competition.
The commission was also concerned about the high levels of concentration in the construction-services sector, and the opportunity this offered for bid rigging, which if left unrestrained, could add to the costs associated with government's R500-billion-plus, five-year public infrastructure roll-out.
In a separate interview with Engineering News, Bruce stressed that, while there was a tendency towards negotiated contracts, there was still a strong competitive element in the sector.
"This [negotiated contracts] usually involves the preselection by the client of two or three preferred partners, which have to go through some initial hurdles. These hurdles are designed to choose the one most suited to go forward," he explained, adding that the key competitive element in these instances related to the economic viability of the project itself.
He acknowledged, though, that historical practices of similar contractors partnering to ensure work flow in the context of a market in decline, would probably be an anathema in the current environment.
"As we move forward into a growing market, it is incumbent on as many players as possible to grow their capacities, so as to be able to deal with the project in their own right and only alliance, or partner, with other players who bring a different set of skills into the mix."
He suggested that market participants with similar capabilities would probably no longer even consider partnering. "I think today, that would be viewed as anticompetitive," he concluded.
Edited by: Creamer Media Reporter© Reuse this
To subscribe email firstname.lastname@example.org or click here
To advertise email email@example.com or click here
Other Video News
Recent Research Reports
Construction 2016: A review of South Africa's construction industry (PDF Report)
Creamer Media’s Construction 2016 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; key participants; local demand; geographic diversification; corporate activity; black economic...
Energy Roundup – February 2016 (PDF Report)
The February 2016 roundup covers activities across South Africa for December 2015 and January 2016 and includes details of a Government Gazette notice that confirms Cabinet’s decision to move ahead with the 9 600 MW nuclear procurement programme; State-owned power...
Energy Roundup - December 2015 (PDF Report)
The December 2015 roundup includes details of State-owned utility Eskom’s application to claw back R22.8-billion; South Africa’s ranking as an investment destination for renewable energy; and a nuclear expert’s thoughts on reactor designs for South Africa’s nuclear...
Water 2015: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2015 Report considers the aforementioned issues, not only in the South African context but also in the African and global context in terms of supply and demand, water stress and insecurity, and access to water and sanitation, besides others.
Input Sector Review: Pumps 2015 (PDF Report)
Creamer Media’s 2015 Input Sector Review on Pumps provides an overview of South Africa’s pumps industry with particular focus on pump manufacture and supply, aftermarket services, marketing strategies, local and export demand, imports, sector support, investment...
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
This Week's Magazine
Power and automation company ABB is in the launch phase of its highest payload, multipurpose industrial robot, the IRB 8700. The robot has a reach of 3.5 m and can handle a payload of up to 800 kg. “When designing the IRB 8700, we emphasised reach and payload, as...
Identity and Access Management (IAM) is a critical facet of a connected security ecosystem, as controlling the confidentiality, integrity and authorisation of data access and use is key to securing new digital business channels. However, companies face several...
Data underpins digital business models, the digital economy, the Internet of Things and the fundamental changes in the ways people interact and protecting data is crucial to securing new ways of doing business, says T-Systems South Africa information and...
The City of Cape Town will issue a tender for the procurement of electric buses for its MyCiTi service, in line with the council’s commitment to lower its carbon footprint, says executive mayor Patricia de Lille. The tender, to be advertised early in February, will...
The iSimangaliso Wetland Park Authority signed a R10-million contract last month with local tailings storage facility specialists Cyclone Engineering Projects to remove about 100 000 m3 of dredge spoil obstructing the natural course of the uMfolozi river, in...