The Civil Engineering Contractor April 2019 | Page 10

CONTRACTORS ON SITE
The contract involved construction for client British American Tobacco SA.
GD Irons to pay R4m fine for collusion
GD Irons construction company has been fined R4-million
for engaging in collusive tendering on a project for the
construction of a depot for British American Tobacco South
Africa (Batsa). GD Irons admitted to engaging in this collusive
conduct with Giuricich on the R50-million Batsa project
in contravention of the Competition Act. (https://www.
comptrib.co.za/cases/consent-order/retrieve_case/2566)
Independent Newspapers reported that in terms of the
agreement, R1.2-million of the fine would be paid within
30 days of the confirmation of the settlement agreement
and the remaining R2.8-million on the first anniversary of
the confirmation of the agreement. A settlement agreement
between the Competition Commission and GD Irons was
confirmed by the Competition Tribunal.
The commission told a tribunal hearing that Giuricich
provided a cover price for the tender for the Batsa depot
project, with Giuricich in return paying GD Irons a
R50 000 loser’s fee. A cover price is a price obtained or
provided by a firm from another competing firm to ensure
they were not awarded a contract to prevent them from
being removed from the client’s tender list or to anti-
competitively coordinate the allocation of projects.
The commission said Giuricich submitted a leniency
application for their involvement in various collusive conduct
cases in terms of the construction fast-track settlement
process, with GD Irons implicated in one project. GD Irons
started to engage with the commission in an attempt to
settle the matter the moment it was made aware of the case,
but the settlement negotiations deadlocked and resulted in a
delay. The commission said that in determining the penalty,
it had also considered the financial position of GD Irons,
which was one of the factors that led to the deadlock.
Paul Coetser, appearing for GD Irons, said the company
was in the process of becoming 51 per cent black-owned and
since this contravention happened in 2006, there was a desire
to not burden the new shareholders with the fine. He said the
existing shareholders, therefore, undertook that the company
would pay the fine and if the fine was not fully paid before
the implementation of the black economic empowerment
transaction, they undertook to pay it themselves. nn
Ntuzuma D phase 2 and 3 housing project
Construction of civil services and infrastructure (4th
contract) for the Ntuzuma D phase 2 and 3 housing project,
Ward 43, near Durban in KwaZulu-Natal (estimated project
value: R199-million) is under way. It has been confirmed
8 | CEC April 2019
that DTA 688737 was awarded to W K Construction.
The contractor has received the appointment letter for a
contract period of 36 months. Construction was expected
to commence in mid-January 2019. nn
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