Controversial P6m tender given go-ahead

The Competition Commission has given two companies the green light to conduct P6 million-worth of business with the Hukuntsi Sub-district Council. Earlier this year, the Competition Authority made an application to the Commission to suspend the tender while it undertook investigations.

The matter came before the Commission on Wednesday morning and when commissioner Dr. Selinah Peters asked the Authority’s lawyer, Duncan Morotsi, what the outcome of investigations meant with regard to the tender, the answer was cryptic. “The tender can go ahead. I don’t want to disclose some other things. I will only say that much,” Morotsi said. Hukuntsi Sub-district Council had put out a tender for the supply and delivery of building materials and smalls tools. From the group that tendered, the winners were Ambica Trading and K-Build Hardware. After such announcement, it looked like all systems go until the Authority received complaints that the bids that the two companies had put in were not completely above aboard.

In response, the Authority applied to the Commission to suspend the tender while it initiated an investigation. It was alleged that both companies had entered into a “horizontal agreement” with sister companies by agreeing on the price, terms and conditions of bids to be submitted. K-Build had supposedly entered into such agreement with Lerato Hardware and Ambica had done the same thing with Amico Ventures.

The Competition Act defines a “horizontal agreement” as “an agreement between enterprises each of which operates, for the purpose of the agreement, in the same market and would therefore normally be actual or potential competitors in that market.” A horizontal agreement between the companies in question would contravene Section 25(c) of the Act which attaches liability to “bid-rigging.” The Authority’s investigation had sought to establish whether the Hukuntsi Sub-district Council was informed of the purported K-Build/Lerato Hardware and Ambica/Amico Ventures horizontal agreements.

Morotsi told the Commission on Wednesday that investigations are complete and it is no longer in the Authority’s interest to keep the tender in suspension. However, the Authority will not be revealing the contents of the report just now and will exercise its prerogative as regards the next course of action. “It is entirely up to the Commission to decide whether to make a referral to the Commission or not,” Morotsi said. Ambica was represented by attorney Itumeleng Tebagano while K-Build was represented by its director, Gloria Semele. Presiding Commissioner, Tendekani Malebeswa, ordered the Authority to pay Ambica’s legal costs as well as travel and other expenses incurred by Semele.

Last modified on Monday, 29 September 2014 15:35

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