The Construction Industry Development Board (CIDB) on Tuesday said it would initiate its own investigation and inquiry into the conduct of several construction firms found guilty by the Competition Commission of bid-rigging.

The Competition Commission announced on Monday that it had, following a Construction Fast-Track Settlement Process, fined 15 major construction firms a collective R1.46-billion for “rampant” collusive tendering related to projects concluded between 2006 and 2011.

The CIDB said in a statement that it welcomed the announcement that a settlement had been reached and said it would await release of the commission’s report and the decision of the Competition Tribunal, which would be “crucial and pivotal” to its own investigation and enquiry.

The industry regulator said it was currently in the process of constituting an investigation team and a presiding officer for the enquiry, and had not yet decided on the nature of sanctions to be imposed, as this would pre-empt the outcome of the formal inquiry.

CIDB acting CEO Hlengiwe Khumalo commended the settlement process, which she said had revealed undesirable conduct with the potential to entrench itself “insidiously” in the industry.

“Collusion, by its nature, is exclusionary and, therefore, has the impact to undermine the development and transformation in the construction industry. The CIDB was established in terms of the CIDB Act 38 of 2000 to regulate the construction industry and promote its development, including the development of the emerging sector,” she commented.

Industry organisation Business Unity South Africa (Busa) added in a statement on Tuesday that it too welcomed the investigation by the Competition Commission into anticompetitive practices in the marketplace.

Busa CEO Nomaxabiso Majokweni said the organisation strongly supported the competitive system and “deplored” any anticompetitive and unethical behaviour.

“A competitive system is one that is likely to grow faster and create more jobs in the medium term and any collusive activity that undermines this will have a negative impact on South Africa’s economic performance,” she said, adding that an open economy that encouraged fair participation and the entry of emerging businesses was critical.

“It is for this reason that Busa was involved in the drafting of competition legislation and continues to have regular meetings with the Competition Commission on the application of this legislation,” Majokweni commented.

Busa also developed an Integrity Pact for application in infrastructural projects to promote a culture of integrity and ethical conduct.

Majokweni noted that public–private partnerships in the delivery of infrastructure would only work effectively if they were devoid of restrictive practices.

“As such, the work of the Competition Commission in normalising the marketplace is welcome. Business is, together with other social partners, working on ways to implement the National Development Plan, and expedited infrastructural roll-out remains one of the key areas of collaboration,” she said.