Penalties imposed on construction companies welcomed

The Competition Commission reached a settlement with 15 construction firms, who have agreed to pay fines to the tune of R1.46bn for collusive tendering.

This paves the way for CIDB to initiate its own process of investigation and inquiry into the firms' conduct, in terms of Section 28 of the Construction Industry Development (CID) Regulations of 2004, as amended, and the CIDB Code of Conduct.

The CIDB now awaits the report of the Competition Commission and decision of the Competition Tribunal, which are crucial to its investigation and enquiry.

It is also in the process of constituting an investigation team and a presiding officer for the CIDB enquiry.

The CIDB Acting CEO, Hlengiwe Khumalo, has commended the Competition Commission on the case, which has brought to light undesirable conduct, "with the potential to entrench itself insidiously within the industry".

She said collusion by its nature was exclusionary and therefore undermined development and transformation, which were necessary within the construction industry.

Contrary to media statements, the CIDB has not yet decided on the nature of sanctions that will be imposed as this would be pre-empting the outcome of the formal inquiry.

The CIDB is established in terms of the CIDB Act 38 of 2000 to regulate the construction industry and promote its development, including the development of the emerging sector.