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Monday Feb 04, 2013

Cape Town may demand stadium money back

The City of Cape Town will try to recover money from construction companies if the Competition Tribunal finds them guilty of collusion in the building of the Cape Town Stadium.

The companies could also be sued for damages, and blacklisted.

An archival photo of Cape Town stadium under construction.

City Press reported yesterday that a major investigation by the Hawks had revealed that top construction companies illegally rigged contracts worth billions of rand.

It said the probe disclosed details of a "decades-long, formal kickback and price-fixing racket that allegedly involved prominent names in the industry".

Some of the companies allegedly involved in the bidrigging were: Wilson Bayly Holmes-Ovcon (WBHO), Stefanutti Stocks, Murray & Roberts, Group Five, Concor, and Aveng.

The newspaper said at least 11 affidavits had been made by executives from Stefanutti Stocks, one of the country's biggest construction firms, to the Hawks' serious economic offences investigator and the National Prosecuting Authority.

The statements had also been handed to the Competition Commission for its probe into construction industry tender-rigging, thought to involve contracts worth at least R30 billion.

According to the affidavits, the projects "fixed" included the Cape Town Stadium which was built for the 2010 World Cup, the National Stadium (FNB Stadium) in Soweto, the Coega development project in the Eastern Cape, the Nelson Mandela Bridge in Johannesburg and the Gautrain.

In their statements, the executives admitted they may be guilty of fraud, corruption and racketeering, and offered to co-operate with police in exchange for immunity from prosecution.

City council spokeswoman Kylie Hatton said yesterday that when the city had evaluated the initial stadium tender, no evidence of tender collusion was found.

"We had no grounds for suspicion then. At the sub-contractor stage, there were concerns and we raised these with National Treasury, and National Treasury requested the Competition Commission to do an investigation into allegations of collusion and possible price-fixing. It also became clear we were not the only city to raise concerns," Hatton said.

The Competition Commission held a series of hearings during 2011 and 2012 on the matter, she said.

The commission would hand its report to the Competition Tribunal, which would make a finding on the allegations.

"Based on the outcome, if they are guilty, we will pursue cost-recovery from the companies, and possibly damages and possibly blacklisting the companies," Hatton said.

Asked if the city had found problems only with sub-contractors, and not the big companies mentioned in the Hawks probe, Hatton replied: "There may be problems elsewhere and the commission needs to investigate that and has been investigating that."

Cape Times

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