Trouble for construction sector in South African deepened this week after reports emerged that Hawks-The Directorate for Priority Crime Investigation-would launch fresh probe against construction companies in the country over allegations of fixing of contracts.
The criminal and civil charges mainly concerns the construction of World Cup stadiums in one of the potentially worst incidents of corruption facing the sector.
Trouble for construction sector in South Africa began 2013 whenThe probing of criminal charges against various construction companies in South Africa was initially slated to start. But it was put on hold while the Competition Commission finalized its investigation of various cases of collusive behavior. The commission has since sent its last case to the tribunal for prosecution.
Poor economic climate has largely affected the industry and now it also faces law suits as companies claiming they suffered losses as a result of the collusion seek redress.
Investigation of criminal charges by the Hawks is said to resume according to sources in a bid to counteract the collusive behavior.
A statement from the commission last year read “The commission initiated investigations in the construction sector in 2009 after receiving evidence that collusion was pervasive.” The commission subsequently launched the construction fast-track settlement process in February 2011 to expedite the resolution of these cases given their magnitude.
The commission settled with 15 out of 18 firms that participated in and were found liable under the fast-track settlement in 2013. The agreements with the 15 firms on settlement were confirmed by the tribunal in July 2013, with a total R1.4bn in administrative penalties levied against these firms.”
Itumaleng Lesofe, the commission’s spokesman confirmed their agreement with the Hawks that the probe should wait until the commission had finished its own investigations.
“We will get in touch with the hawks now that we are almost complete,” said Lesofe. Hangwani Mulaudzi, Hawks spokesman confirmed this was the case.
According to Chantelle Benjamin, Tribunal spokeswoman, about 10 entities including the Gauteng provincial government, Coega and Transnet had applied for, and been granted, certificates of decision which would allow them to take civil action against the collusive companies.
The collusive behavior is estimated to have added about R14bn to the construction costs of the 2010 World Cup stadiums with costs carried by the municipalities involved.
WBHO, Stefanutti Stocks, Group Five and Basil Read were however not available for comment as they had closed for the December holidays.
