The South African National Roads Agency (SANRAL) intends to withdraw its civil damages claims against a number of construction firms found guilty of collusion. This follows the agreement reached between government and seven colluding construction companies.

SANRAL announced in May this year that it had lodged claims with the Gauteng Local Division High Court against seven construction firms that were found guilty of collusive conduct by the Competition Authorities, and where SANRAL was affected.

The claims, totalling between R600 and R760 million, were for work relating to the Gauteng Freeway Improvement Project as well as works that were carried out in other parts of the country.

At the time, Murray & Roberts and Basil Read, who were named along with Concor, WBHO Construction, Group Five, Stefanutti Stocks and Raubex, reported that they would oppose the claims.

 

Government settlement with colluding companies

SANRAL is party to the settlement agreement recently reached between Government through the Presidential Infrastructure Coordinating Commission (PICC) and seven contractors, namely Aveng, Raubex, Steffanutti Stocks, WBHO Construction, Basil Read, Group Five, and Murray & Roberts.

The agreement will see a R1.4 billion fine imposed by the competition authorities which will be paid by the companies into the National Revenue Fund. A further R1.5 billion will be contributed to a fund, called the Tirisano Trust, to support social investment initiatives targeting previously disadvantaged communities.

A transformation commitment will also be introduced by each of the seven companies, where at least 40% of the shares in the company will be sold to black South Africans, or the company will work with up to three black-owned construction partner companies to help them generate turnover equal to 25% of its own turnover.

In addition, an integrity commitment will be signed by the CEO of each company that commits to wide-ranging steps to ensure no collusive or corrupt practices in the company, in its dealings with competitors, government or other private sector clients.

The settlement agreement provides for certain formal processes to be finalised within the next few weeks.

SANRAL reports that, as an agency of government, it is waiting a follow-up announcement from government on concluding certain matters relating to the agreement.