JOHANNESBURG Oct 11 Six South African
construction companies will contribute a total of 1.25 billion
rand ($90 million) over the next 12 years towards a fund to
develop skills in the sector and give black workers a bigger
role, a cabinet minister said on Tuesday.
Economic Development Minister Ebrahim Patel said the
voluntary contribution would be in addition to a 1.4 billion
rand penalty imposed by antitrust authorities on the sector in
2013 for collusion in tendering processes.
"There are financial penalties for not complying (with the
pledged contributions)," Patel added.
The Competition Commission investigated 140 projects in both
the private and public sectors over almost four years before
imposing the fine paid by 15 of 18 companies found to have
breached tender rules in Africa's most industrialised country.
Over the next 12 years, construction companies will be
required to make a collective annual payment into the fund,
which will be managed by industry representatives and government
officials, the minister said.
The deal also settles potential claims for damages from
state-owned entities against companies in the sector, a
provision that most of the firms implicated have had to flag in
their financial results for the past few years.
South Africa's economy is still mainly in white hands more
than two decades after the end of white-minority rule.
As part of the deal, each firm also committed to either
transfer 40 percent of its equity to black South Africans or to
help emerging black-owned enterprises to grow.
"The objective of the fund will be the development,
enhancement and transformation of the construction industry, as
well as the promotion of social infrastructure for all South
Africans," one of the signatories, Group Five, said in
The others include Wilson Bayly Holmes-Ovcon,
Stefanutti Stocks, Raubex, Aveng and
Murray and Roberts will seek approval of the deal
by its board and is expected to join the other firms within a
week, said Patel, increasing the total contribution to 1.5
South Africa's construction industry has slowed sharply as
government contracts, which big companies depend on, stall and
weak commodity prices hit demand from the mining industry.
($1 = 13.8542 rand)
(Reporting by TJ Strydom and Nqobile Dludla; Editing by James
Macharia and Mark Potter)