The Competition Tribunal has found three firms in the formerly JSE-listed Esor group of companies guilty of price fixing, market allocation, and collusive bidding in construction-related markets.
The Tribunal fined Esor Limited, Esor Africa (Pty) Ltd, and Esor Construction (Pty) Ltd R15 700 000 million for contravening the country’s competition rules, more than ten years after the matter was referred to the tribunal for a ruling.
The Competition Commission has welcomed the ruling which was handed down on May 5, in which it found the Esor group of companies had operated as part of a cartel and was guilty of price fixing, market allocation, and collusive bidding in construction-related markets for geotechnical services, including piling, lateral support, grouting and geotechnical drilling investigation services.
The Tribunal found that they had contravened the Competition Act in that from the 1970s to at least 2015 the companies had been part of a construction cartel that had concluded agreements amongst themselves, fixed tender prices, and allocated tenders/customers and projects amongst themselves. The ruling followed a complaint initiated by the Commission on March 29, 2009 which was referred to the Tribunal on March 2, 2011.
Esor was established in 1985 and became one of South Africa’s benchmark civil engineering and construction groups, providing specialist construction solutions including developments, building and housing, infrastructure, pipelines, pipe services, and sanitation.
The Tribunal found that the construction cartel had formalised what was known as the Piling Group or the Book Club, which was an arrangement to fix prices and collusively tender for geotechnical projects which included piling, lateral support, drilling, and grouting. Some of the projects in which it had been involved included the Lusip Dam in Swaziland, the Sappi/Saiccor piling project, the Moses Mabhida Stadium piling project, and the Braamhoek Dam Grouting project, the Coega Harbour diaphragm wall project, Gautrain Rapid Rail Link project, Olifantsfontein Treatment plant and the Lesotho Highlands Water Project.
The case against Diabor Pty (Ltd), one of the remaining respondents in the matter, was dismissed.
Four other companies - Geomechanics CC, Geomech Africa (Pty) Ltd, Rodio Geotechnics (Pty) Ltd, and Dura Soltanche Bachy – were initially cited as respondents but reached settlement agreements with the Commission.
* This report has been updated with the following:
Freight News reported a story headlined "Gautrain and Coega project construction firms found guilty of price fixing" on Tuesday 10 May. We would like to make it clear that the Competition Tribunal ruling referred to in the article was made against the Esor group of companies, including Esor Limited, Esor Africa (Pty) Ltd, and Esor Construction (Pty) and not against the Coega Special Economic Zone (SEZ) or Coega Development Corporation. The tribunal's court papers make reference to "Coega Harbour" but it has now been brought to our attention by the CDC that there is no entity known as "Coega Harbour." The matter is being addressed with the Competition Tribunal.
