Dura agrees to pay fine for role in collusion

Geotechnical specialists Dura Soletanche-Bachy has agreed to pay a fine of R988 589.08 for collusive tendering on 11 construction projects. This follows Dura entering into a settlement agreement with the Competition Commission on these contraventions of the Competition Act. The penalty constituted about 2 percent of Dura’s total South African turnover in its financial year to December 2014. The Competition Tribunal yesterday confirmed the settlement agreement. It follows the commission in May 2009 initiating a complaint against Dura for certain alleged collusive arrangement with competitors in the market for piling, lateral support, grouting and geotechnical drilling investigative services. In terms of this arrangement, projects were routinely divided among the members of the cartel in accordance with a scorecard, which largely corresponded to their market share.

The commission in February 2010 initiated a further complaint against Dura for alleged collusive tendering related to the market for geotechnical drilling investigation services and consolidated these two complaints because they largely related to the same respondents. Layne Quilliam, the legal counsel for the commission, said the commission in August 2009 initiated a further complaint against Hochtief, Concor, Group Five, Dura, Stefanutti, Nishimatsu Construction and Grinaker LTA for alleged collusive tendering, or alternatively price-fixing, related to the Durban undersea tunnel project. The commission’s investigation found that Dura, Esorfranki, Geomechanics, Rodio, Diabor and Grinaker LTA agreed on a formal arrangement, which governed how tendering processes should be conducted by these firms, to allocate work. This arrangement set out procedures to be followed by these firms once a tender was advertised to ensure the tender was awarded to the firm whose turn it was to get the work.

Representatives of the firms compiled and managed the scorecards in line with an agreed percentage of the market share allocated to each of the firms. The 11 projects affected by these arrangements were the Inner Circle Building in Johannesburg; the Mercure Hotel in Johannesburg; two tenders for the Centurion Gate project in Pretoria; the Lusip Dam in Swaziland; the Lesotho Highlands Water Project; the Gautrain Rapid Rail Link project; phase one and two of the Braamhoek Dam; the Coega harbour diaphragm wall; and Durban harbour tunnel project. Quilliam said that the complaints initiated by the commission preceded the invitation for construction firms to participate in the fast-track settlement process, which meant Dura could not settle these complaints in terms of that process. The tribunal also confirmed a consent agreement entered into between listed construction company Basil Read and the commission in terms of which Basil Read was granted conditional immunity for cover price-fixing on a tender for the rehabilitation of sectors of the P65/2 road from Parys to the N1.

The tribunal heard Basil Read reached agreement with Wascon and Meyker Re-Teng Construction on the submission of cover prices for this tender. In terms of this agreement, Basil Read and Wascon would bid an inflated price to enable Meyker to win this tender, with Meyker, Wascon and Basil Read also agreeing to pay a loser’s fee to each of the losing bidders. Quilliam said Meyker was awarded the tender by Sanral but for reasons unknown to the commission only paid a portion of the loser’s fee to Basil Read. Wascon and Meyker have since been liquidated.