Tribunal clears four firms, three JVs of collusion in R240m Eskom tender

Tribunal clears four firms, three JVs of collusion in R240m Eskom tender

Tribunal clears four firms, three JVs of collusion in R240m Eskom tender

The Competition Tribunal has dismissed a case of collusive tendering through price fixing involving a 2015 Eskom tender worth R240m against four firms and three joint ventures (JVs). 

The tribunal dismissed the complaint after finding that the firms were not competitors. 

The tender was for the supply, transportation, delivery, installation and dismantling of scaffolding and thermal insulation at Eskom’s 15 coal-fired power stations. 

Respondents to the complaint, initially launched by Eskom, were SGB-Cape and the three firms with which SGB-Cape partnered: Tedoc Industries (Pty) Ltd, Superfecta Trading 159 CC and Mtsweni Corrosion Control (Pty) Ltd. Other respondents are the three joint ventures between them, namely Tedoc SGB-Cape JV, Superfecta SGB-Cape JV and Mtsweni SGB-Cape JV.   

The tribunal, in its reasons given on May 30, found that the facts of the case did not support the Competition Commission’s argument that, by submitting four separate tenders, SGB-Cape and the three joint ventures were in a “horizontal relationship” and thus competitors.   

The Competition Act prohibits firms that are in a horizontal relationship (competitors) from entering into or participating in agreements or concerted practices which involve conduct such as price fixing, dividing markets or collusive tendering.   

The bids were submitted by SGB-Cape, as the controlling mind, on behalf of all the JVs. The tribunal said if SGB-Cape was the single controlling mind, it followed that it could not compete with itself.

“Furthermore, because the joint ventures would not exist in the absence of this tender, they could not compete with each other or with SGB-Cape, absent the tender,” the tribunal said in a statement. 

As a result, the tribunal found there had been no contravention of the law.

SGB-Cape is focused on the rental and sale of products and services related to scaffolding, thermal insulation, corrosion protection and asbestos removal. Tedoc, Mtsweni and Superfecta are human resource companies while Mtsweni has also engaged in some small-scale construction and scaffolding work.

The JVs between SGB-Cape and each joint venture partner were established specifically for the purpose of bidding for the tender. After Eskom withdrew its complaint, the commission continued its investigation and subsequently initiated its own complaint against Tedoc, Superfecta and Mtsweni.

The commission later referred the complaint to the tribunal for adjudication. The firms had denied the commission’s allegations. 


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