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Govt concerned about construction collusion – Ndebele

3rd February 2011

By: Sapa

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The large-scale involvement of construction firms in collusive bidding practices is concerning to the government as a major client, Transport Minister Sibusiso Ndebele said on Thursday.


"We are distressed and concerned at the news that South African construction companies had been found by the Competition Commission to have colluded on the costing of 2010 FIFA World Cup projects," Ndebele said in a statement.

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The government was a major client of the construction sector and had spent "staggering amounts of rands" on construction for the World Cup, he said.


The Competition Commission said on Tuesday it was investigating 65 bid-rigging cases in the sector, involving over 70 projects valued at R29-billion. It called on those involved to apply for a "fast-track settlement".

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The implicated bids included World Cup soccer stadiums, the Gautrain and various road construction projects, Ndebele said.


The transport sector spent R25-billion on the Gautrain, R19-billion on the Airports Development Programme and R23-billion on the Gauteng Freeway Improvement Scheme.


"That we were possibly robbed leaves a bitter taste in my mouth," Ndebele said.


The investigation had raised various issues.


"The first is about the nature of our construction industry and, in particular, the dominance of a few firms.


"In this regard, we welcome the statement by the commission that it was not only interested in retribution, but was cleaning up the construction industry."


The second issue the minister raised related to Broad Based Black Economic Empowerment (BBBEE).


The Construction Sector Charter "indicates that the sector is beset by vast inequalities in ownership, with little transformation and limited numbers of black people, especially black women, in controlling positions, managerial positions and in the specialised professions in the larger enterprises in the sector".


The transport department planned to spend billions of rands of taxpayers' money in the next 20 years, said Ndebele.


"Our programme will create thousands of jobs, develop thousands of BBBEE entrepreneurs and upgrade the rural parts of our country while maintaining our current transport infrastructure. Our programmes will transform our country forever.


"We must therefore be clear; we want to get to the bottom of this matter."


He asked whether there were any alternatives, such as significant new entrants big enough to manage the projects.


"We would like to work with industry partners who are genuine about transformation and empowerment," he said.


"We must deploy our huge expenditure to force the change we want to see: a better country not only for a minority but for a broad section of our people."
 

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