18 February 2013

Namibia: Swakopmund Construction Companies Accused of Collusion

THE alleged collusion by four Swakopmund contractors in tendering for the construction of a traffic circle at the entrance to Swakopmund is heading to the High Court.

An investigation of the applicants and their quotations for the project by the council's legal advisors, Kinghorn Associates, suggested the possibility that local contractors DMA Holdings, Precision Construction, Pandora's Construction and Elite Construction colluded in the submission of bids.

The investigation found that all the tenders were allegedly filled in by the same person for the same construction period and at the same price. The page listing of previous work done also suggested that the main partner of DMA Holdings is a partner in the other three companies.

The investigation further discovered that based on the company documentation, in particular the amended founding statements, that in respect of DMA Holdings CC, a Deon and Marlene Miljo each holds 45 percent interest, and Anita Marlene Mijo owns ten percent. In respect of Elite Construction CC and Precision Construction CC, Marlene Miljo holds 100 percent interest in each of these corporations. In respect of Pandora's Construction, no partnership documents were provided.

According to the legal advisors, Deon Miljo allegedly misrepresented a number of facts about each of the entities that tendered for the paving works and that there was alleged "collusion, anti-competitive behaviour and perhaps even tender fraud".

The Swakopmund council ordered the contractors to argue why their actions should not be regarded as collusion and why the council should not blacklist them from receiving future contracts from council for the next 12 months. The contractors had five days for their side to be heard.

They failed to take the opportunity, resulting in a recommendation by the management committee to the council to disqualify the contractors from the project worth N$150 000, as well as blacklist them for 12 months starting January 31 2013 and also report the contractors to the Namibian Competition Commission (NaCC) for further investigation.

The council stuck to this decision regardless of a request by the contractors' legal representative for an extension of time to respond to the matter. As a result, a notice of motion was served on council in December 2012 in which the contractors are challenging the council's allegations.

The contractors believe that the council's decisions were unlawful and to be declared null and void.

The council also appointed its own representatives.

In the meantime, new tenders were invited and the job was awarded to another contractor.

The Namibian learned from the NaCC that companies found guilty of collusion are fined according to the court judgement, or ten percent of their "global turnover".

A case was reported by the Swakopmund municipality to the commission, but a decision to investigate has not yet been made.

"Once the decision is made, all relevant parties will be informed as to the outcome thereof and the procedure in terms of the Competition Act will be followed. All investigations or complaints carried out by the commission are however confidential," Dina Gowases, corporate communications officer of NaCC told The Namibian.

When approached for comment, Deon Miljo said the case was sub judice and therefore "we do not want to comment at this stage".

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