Tribunal dismisses commission’s application to amend West Cape referral

10th April 2019 By: Marleny Arnoldi - Creamer Media Online Writer

The Competition Tribunal on Tuesday dismissed an application made by the Competition Commission to amend and supplement a complaint referral relating to alleged collusion by construction companies on a tender for the South African National Roads Agency Limited (Sanral).

The tribunal in August 2018 heard the commission’s application to extend the scope of the complaint referral such that Power Construction would be cited as having contravened the Competition Act by engaging in collusive conduct.

The commission in December 2014 referred a case to the tribunal in which it alleged that construction companies Power Construction (formerly West Cape) and Haw & Inglis (H&I) had colluded in respect of a Sanral tender to maintain a section of the N1.

The commission alleged that West Cape had submitted a bid with no intention of rendering the services. This was allegedly done on H&I’s instruction to ensure that Sanral received enough bids to award the contract in terms of its tender processes. The tender project was ultimately awarded to H&I.

In its referral, the commission sought an order that West Cape had contravened the Competition Act, but claimed that Power Construction had to pay the administrative penalty. However, in the original referral there were no allegations that Power Construction had contravened the Act.

Following arguments at the tribunal and the Competition Appeal Court, Power Construction made a with-prejudice settlement offer to the commission. The commission declined the offer, stating that it had subsequently established that West Cape and Power Construction shared most of their directors.

The commission argued that this would be sufficient to implicate Power Construction in the collusive conduct. As such, the commission believed Power Construction’s higher turnover figures (and not that of West Cape) should be used to calculate the fine.

The companies denied this and said Power Construction’s figures could not be used, as it had never been alleged that the company had contravened the Act. The commission then moved to amend the initial referral to reflect that Power Construction should be implicated along with West Cape.