Tribunal to pursue alleged price-fixing, collusion in R240m Eskom tender

13th August 2018 By: Marleny Arnoldi - Creamer Media Online Writer

The Competition Tribunal has refused an application to dismiss a complaint against companies accused of alleged price-fixing and tender collusion in a R240-million tender issued by State-owned power utility Eskom in March 2015.

The tender was for the supply, installation and dismantling of scaffolding and thermal insulation for 15 of Eskom’s coal-fired power stations and was to run over five years.

The Competition Commission launched an investigation into the matter after a complaint was lodged by Eskom in March 2016.

In its complaint, Eskom said the four bids received were the subject of a collusive agreement as: the same person signed all the bids; technical, financial and other requirements were identical; the first respondent, SGB Cape’s prices were the lowest, while two of the joint ventures (JVs) submitted the same prices and the rate differences between the first respondents and the JVs were consistent; and the terms and conditions of the JVs were identical and developed by the same attorney.

The commission found that Waco Africa had, through its SGB Cape division, allegedly reached bilateral agreements with Tedoc Industries, Mtsweni Corrosion Control and Superfecta Trading 159 CC to form three JVs – Tedoc SGV JV, Superfecta SGB JV and Mtsweni SGB JV.

SGB Cape allegedly submitted bids on its behalf, as well as on behalf of the three JVs in which Waco held a stake.

In March 2017, Eskom withdrew its complaint, but the commission decided to continue to pursue the complaint against all the respondents.

In a hearing on June 20, the respondents raised several objections to the complaint brought by the commission.

With the tribunal’s decision to dismiss the application to throw out the complaint, the commission is consequently required to make available specified nonprivileged and unrestricted portions of the commission’s record to the respondents and to provide a supplementary affidavit outlining whether the JVs were incorporated or not, as well as the provisions relied upon to show collusive tendering and price-fixing agreements involving Tedoc, Mtsweni and Superfecta.