Editorial

Dear Reader:Citizen Force


Here’s cheek for you. In a recent interview with Engineering News, Raubex Group CEO

Rudolph Fourie said that the local road construction industry will remain under pressure for some time yet, with real relief only possible once the South African National Roads Agency Ltd (Sanral) starts long-delayed tolling on the Gauteng freeways.

And Sanral, in turn, has indicated that it will not build any more of the planned toll roads before tolling has started on the almost-200km of freeways that have been upgraded so far under the Gauteng Freeway Improvement Programme.

Fourie was hopeful that tolling would start in the next six months, but noted that this hope has been dashed often over the past few years.

Noseweek’s response: May those hopes be dashed for a long time after that!

Fourie sounds cheekily impatient, with not even a nod of recognition in the direction of why the public won’t tolerate those tolls churning in the cash to feed the greed of his industry and its bankers.

Since Sanral is clearly not going to do anything to discipline its biggest members for tender rigging and ripping the public off to the tune of billions, it seems the public itself will have to ensure that the industry feels some pain – for as long as it takes to get the message across: you screw us, we screw you.

Noseweek also notes for the record that Sanral’s brothers and sisters in crime at the Construction Industry Development Board (CIDB) are also still “in the process of constituting” an investigation team to “kick-start” their probe into the 15 construction companies that in June admitted to having engaged in collusive tendering on government contracts worth tens of billions of rands. The CIDB first used those words in a press statement issued on 25 June. When Noseweek called them in November, the wording still hadn’t changed, although the CIDB spokesperson’s tone of voice expressed some irritation – with Noseweek – for bothering her with the question.

NOW ASPHALT SUPPLIERS CAUGHT TENDER RIGGING

By contrast, the Competition Commission seems to be steaming ahead with its clean-up operations. Now they’re moving along fast to nail the two main suppliers of asphalt in the Western Cape to government and the road-building industry, Much Asphalt (parent: Murray & Roberts) and, yes, More Asphalt.

Noseweek is reliably informed that they set up their own little cartel way back in 1995, when a year-long price war between them ended inconclusively with both making losses, but neither conceding defeat. The original deal was negotiated by Much’s MD, Jan Beukes, and More’s MD, Rob Fyfe. (Both have since retired.)

Thereafter, on the last Friday of every month, More’s Fyfe and Much’s financial director, Spencer van Eeden, would meet in their sister company, Colas's boardroom  in Epping on the Cape Flats to compare figures and settle up. The deal was that Much (the bigger company) would get 66% of the business, while More was guaranteed 34%. In 1999, Much secretly paid More a total of R980,000 in various monthly instalments, as determined at those meetings in the Colas boardroom, for business it conceded in favour of Much.

And its auditors, DeLoitte & Touche, approved the payments without qualification or comment, year after year.

Unconstrained by competition, the two companies’ prices and profits have soared by multiples of that since then. After a two-year investigation by the Competition Commission, somebody has decided to come clean and an announcement is expected shortly.

Meanwhile Richard Young (See profile in this issue), a defence supplier, is an expert on corruption in and by the defence industry worldwide, and one of the most important (and effective) whistleblowers driving the investigation of that industry’s corrupt dealings with the South African government.

Currently Young is again in the news, asserting his right to cross-examine defence force witnesses testifying – until now, unchallenged – before the Seriti Commission.

The public will be hearing much, much more from him in coming months.

Hopefully others will be inspired to blow the whistle on corruption wherever they happen to find it. Preferably to Noseweek

The Editor

Keywords:
Asphalt
Fraud
Competition
Commission
Much
More
Tender Rigging
Price Fixing
South Africa
Cartel
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