Esor Group found guilty and fined for price-fixing and collusive bidding

Esor, one of South Africa’s benchmark civil engineering and construction groups providing specialist construction solutions including development, building, and housing, infrastructure, pipelines, pipe services, and sanitation, has been found guilty by the Competition Tribunal 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.

Relating to a complaint initiated by the Commission in late March 2009 and referred to the Tribunal in early March 2011, the Tribunal found that Esor Limited, Esor Africa (Pty) Ltd. and Esor Construction (Pty) Ltd. contravened section 4(1)(b)(i), (ii), and (iii) of the Competition Act from the 1970s to around 2015 whereby the companies were part of a ‘construction cartel’ that concluded agreements among themselves, fixed tender prices, and allocated tenders and/or customers and projects among themselves.

The Tribunal found that the construction cartel formalised what was known as the ‘Piling Group’ or the ‘Book Club’ which was an arrangement to fix prices and to collusively tender for geotechnical projects which included piling, lateral support, drilling, and grouting. Some of these projects 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 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.

The Tribunal has fined Esor Limited, Esor Africa (Pty) Ltd., and Esor Construction (Pty) Ltd., a penalty of R15 700 000 (fifteen million seven hundred thousand rands).