Municipal representative organisation, the South African Local Government Association (Salga), has said that, following consultations with representatives from six municipalities affected by private sector bid-rigging during past infrastructure projects, it would seek some form of restitution from those companies found guilty by the Competition Commission of collusive tendering.

“We want to get the money back,” Salga operations chief Lance Joel told a media briefing on Friday.

Following the Construction Fast-Track Settlement Process, the commission last month imposed fines worth a collective R1.46-billion on 15 major construction firms found guilty of “rampant” collusive tendering related to projects concluded between 2006 and 2011.

While conceding that direct settlement discussions with the companies were not off the table, Joel said the organisation would pursue some form of compensation through participation in the Competition Tribunal proceedings.

Following the finalisation of the commission’s findings, it had referred the settlements to the Competition Tribunal for public hearings and final approval, to be heard on July 17 and 18.

However, should the outcome of the tribunal hearings not be “desirable”, Salga would institute civil proceedings against the identified respondents.

Salga had made an application to the tribunal to participate in these proceedings with a view to raising certain aspects and to introduce information that it believed the commission had not considered in its findings.

“By calling on companies to ‘confess’ to wrongdoing, it essentially indicates to us that the commission wholly relied on the companies coming forward [and telling the truth] and, in our view, there was a need for an independent investigation by the commission itself,” said Joel.

He added that municipalities were of the view that the applied penalties were inadequately punitive.

“One gets the impression that there has been leniency,” said Joel, noting that over R28-billion of public-sector projects in the eThekwini metropolitan municipality, the City of Cape Town metropolitan municipality, Nelson Mandela Bay metropolitan municipality, the City of Johannesburg metropolitan municipality, the Polokwane local municipality and the Mbombela municipality had been identified by the commission as having been affected by collusive tendering.

These projects included the construction of the Nelson Mandela Bay stadium; the Soccer City stadium, in Johannesburg; the N17 road link, in Johannesburg; the Durban International Convention Centre; the Peter Mokaba stadium, in Polokwane; the Green Point stadium, in Cape Town; and the Mbombela stadium, in Nelspruit.

Joel noted that while quantification of actual damages was difficult, the commission had indicated that the overcharges related to disclosed anticompetitive behaviour are in the region of between 10% and 30%.

“We won’t be thumb-sucking our numbers, though. Through our legal council, we’ll ensure that we get the correct expertise to quantify the claims from respective municipalities, which is something that we have already embarked on,” he stated.

Commenting on internal measures that had been taken by municipalities to prevent the reoccurrence of collusive activity, Joel said much work had been done on improving supply-chain management processes.

“Salga is also currently engaging with the National Treasury to understand how we can deal with issues in the interim and how infrastructure tenders can be awarded in the interim,” he said.