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The Tribunal has approved the proposed transaction which entails the formation of an economic alliance between WBHO Construction (Pty) Ltd and Trencon Construction (Pty) Ltd (Trencon). The companies intend to operate as a single economic entity i.e. as part of the WBHO Alliance.
 
Trencon will replace Fikile Construction (Pty) Ltd as an Emerging Contractor in the WBHO Alliance. The same merger conditions imposed on the initial transaction involving Fikile will apply to Trencon.
 
The conditions
 
Among others, the alliance members must ensure that all information submitted to the Fund for reporting purposes is aggregated such that it does not reveal competitively sensitive information.
 
Any person/s who is directly and operationally involved in the mentorship and development of the Emerging Contractors may not be the same person/s whom WBHO will appoint as a Trustee to represent WBHO’s interests in the fund.
 
Any person appointed as a Trustee representing WBHO’s interests in the Fund shall sign the necessary non-disclosure agreements to prevent the exchange of competitively sensitive information between the WBHO Alliance and other construction companies.
 
In addition, each of the Alliance Members must put precautionary measures in place to ensure that competitively sensitive information does not flow from the alliance to other construction companies through the Fund or any other medium.
 
Regarding monitoring of the alliances, the merging parties must submit annual reports detailing the projects they have worked on. They must also provide a report upon termination of the alliance.
 
Background
 
The alliance is the result of a settlement agreement concluded between several construction companies and the Government in October 2016 (as represented by the Ministers of Rural Development and Land Reform, Economic Development, Public Works and Transport). The settlement agreement, entered into by several companies, followed a Commission investigation into widespread collusion in the industry over several years.
 
The 2016 settlement agreement made provision for the establishment of a Fund to develop and enhance the Construction Industry and in particular, transformation objectives. The Trustees of the Fund are made up of construction companies who are party to the settlement agreement as well as government representatives.

Issued by The Competition Tribunal