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South African geotechnical “book club” faces competition tribunal

Several South Africa-based ground engineering companies are facing charges of acting as a cartel to collude on tenders and fix prices at a Competition Tribunal.

gautrain

gautrain

Some projects on the Gautrain scheme are thought to have been affected by

The Competition Commission believes that Esofranki and Diabor acted with other major players in the sector as a cartel over a 15 year period.

Dura Soltanche Bachy, Grinaker LTA and Rodio Geotechnica were also initially charged with the offence. Dura Soltanche Bachy formed an agreement with the Competition Commission in 2015 over the issue and agreed to pay a fine of just under ZAR1M (£58,000), while Geomechanics agreed a ZAR1.65M (£94,000) fine for collusive tendering on some Gautrain schemes and the Lesotho Water Highlands project. Rodio Geotechnics agreed to a fine just head of the start of the tribunal and accepted a ZAR885,963 (£52,000) fine for collusive tendering on nine projects in joint venture with Grinaker LTA.

According to the Competition Commission, the group which operated in Johannesburg and KwaZulu-Natal called itself the “book club” and “breakfast club” and allocated tenders according to each party’s market share. The group had a code of conduct with penalties and sanctions for those that failed to work within the cartel.

Esorfranki is reported to have accepted collusive conduct on the Lusip Dam grouting project in Swaziland in 2005 and the Sappi/Saiccor piling scheme in KwaZulu-Natal in 2006 but is disputing these practices were applied to another 11 project the firm undertook. Diabor has not accepted its involvement in the cartel and disputing the claims.

The case is expected to continue next week.

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