SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this
document in compliance with the law and SAFLII Policy
COMPETITION TRIBUNAL
REPUBLIC OF SOUTH AFRICA
Case No: CR078Aug16/SA276Feb18
In the matter between:
The Competition Commission Applicant
And
Plasser South Africa (Pty) Ltd Respondent
Panel : AW Wessels (Presiding Member)
: M Mazwai (Tribunal Member)
: A Ndoni (Tribunal Member)
Heard on : 21 February 2018
Decided on : 21 February 2018
Settlement Agreement
The Competition Tribunal hereby confirms the consent agreement as agreed to and
proposed by the Competition Commission and Plasser South Africa (Ply) Ltd
annexed hereto marked "A".
Presiding Member
Mr Andreas Wessels
21 February 2018
Concurring: Ms Mondo Mazwai and Ms Andiswa Ndoni
IN THE COMPETITION TRIBUNAL OF SOUTH AFRICA
CT CASE NO: CR078Aug16/SA276Feb18
CC CASE NO: 2014Aug0465
In the matter between:
THE COMPETITION COMMISSION Applicant
And
PLASSER SOUTH AFRICA (PTY) LTD Respondent
CONSENT AGREEMENT IN TERMS OF SECTION 490 READ WITH SECTION
58(1)(b) OF THE COMPETITION ACT, NO. 89 OF 1998, AS AMENDED,
BETWEEN THE COMPETITION COMMISSION AND PLASSER SOUTH AFRICA
(PTY) LTD, IN RESPECT OF A CONTRAVENTION OF SECTION 4(1) (b)(ii) AND
(iii) OF THE COMPETITION ACT, 1998
Preamble
The Competition Commission and Plasser South Africa (Pty) Ltd hereby agree that
an application be made to the Competition Tribunal for the confirmation of this
Consent Agreement as an order of the Tribunal in terms of section 49D read with
section 58(1)(b) of the Competition Act No. 89 of 1998, as amended, in respect of a
contravention of section 4(1)(b)(ii) and (iii).
1 DEFINITIONS
For the purposes of this consent agreement the following definitio ns shall
apply:
1.1 "Act" means the Competition Act No. 89 of 1998, as amended;
1.2 "Commission" means the Competition Commission of South Africa, a
statutory body established in terms of section 19 of the Act, with its
principal place of business at 1st Floor, Mulayo Building (Block C), the
DTI Campus, 77 Meintjies Street, Sunnyside, Pretoria, Gauteng;
1.3 ''Consent Agreement" means this agreement duly signed and
concluded between the Commission and Plasser;
1.4 "Days" mean business days;
1.5 "Lennings" means Lennings DEC Rail Service (Ply) Ltd, a subsidiary of
Aveng (Africa) Limited, a public company duly incorporated in
accordance with the company laws of the Republic of South Africa with
its principal place of business at 1 Lily Van Niekerk Road, Dunswart
Boksburg.
1.6 "Parties" means the Commission and Plasser collectively;
1.7 "Plasser" means Plasser South Africa (Pty) Ltd, a private company duly
incorporated in accordance with the company laws of the Republic of
South Africa with its principal place of business at 20 Lautre Road,
Stonnill, Roodepoort (previously Plasser Railway Machinery (S A) (Ply)
Ltd).
1.8 "RAMCO" means Railway Mechanised Maintenance Company (Pty)
Ltd, a company incorporated in accordance with the Company Laws of
the Republic of South Africa with its principal place of business 20 Lau!re
Road, Stormill, Roodepoort.
1.9 "Tribunal" means the Competition Tribunal of South Africa, a statutory
body established in terms of section 26 of the Act, with its principal place
of business at 3 rd Floor, Mulayo building (Block C), the D TI Campus, 77
Meintjies Street, Sunnyside, Pretoria, Gauteng.
2 INVESTIGATION AND FINDINGS OF THE COMMISSION
2.1 On 11 February 2014, the Commissioner initiated a complaint against
Aveng (Africa) Limited, Lennings and Plasser for market division and
collusive tendering in contravention of section 4(1)(b)(ii) and (iii) of the
Act in the market for railway maintenance and services in South Africa.
On 26 August 2014, the Commission amended the complaint initiation to
include RAMCO as a respondent. Where appropriate Aveng, Lennings
and Plasser shall be referred to as "the Respondents".
2.2 The Commission's investigation under Case No. 2014AUG0465
revealed !he following:
2.2.1 Aveng, through its subsidiary Lennings, agreed with Plasser to
engage in tender a llocation and cover price arrangements, which
amounted to collusive tendering, in respect of tenders for railway
maintenance contracts issued by Transnet (SOE) Limited. This
conduct is in contravention of section 4(1)(b)(ii) and (iii) of the Act.
The contr acts that were the subject of these collusive
arrangements were concluded in 2004 each for a period of sixty
(60) months. These contracts were
2.2.2 As part of these arrangements Lennings and Plasser agreed to
collude in relation to the Dynamic Stabilizer Continuous Action
Tampers ("Dynacat") tenders issued by Transnet in 2003 and
2004. The Dynacat tender was divided into two phases. Lennings
and Plasser colluded with the intention that Plasser's subsidiary
RAMCO would be awarded the first phase of the tend er and
Lennings would be awarded the second phase.
2.2.3 The first phase was awarded to Plasser's subsidiary, RAMCO, on
21 July 2004. The contract awarded for the first phase was
concluded for a fixed period of 60 months from 10 February 2006,
which period expired on 9 February 2011. The contract was
subsequently renegotiated to extend to 2013.
2.2.4 The second phase was awarded to Aveng's subsidiary Lennings in
or about August 2004. The contract awarded for the second phase
was concluded for a fixed period of 60 months, which period
expired on 23 April 2011. The contract was subsequently
extended to 2013.
3 ADMISSION AND CO-OPERATION
3.1 Plasser admits that it engaged in the conduct set out in clause 2 above
in contravention of section 4(1)(b)(ii) and (iii) of the Act.
4 CO-OPERATION
4.1 Plasser confirms that it has ceased engaging in the conduct set out in
clause 2 above.
5 ADMINISTRATIVE PENALTY
5.1 Plasser agrees that it is liable to pay an administrative penalty in the sum
of R8 427 625.92 (eight million four hundred and twenty seven thousand
six hundred and twenty five rand and ninety two cents). This amount is
less than 10% of its annual turnover for the financial year ended 31
December 2016.
5.2 Plasser shall pay the abovementioned amount to the Commission in
three instalments. Plasser will also pay interest at the rate of 10.25% per
annum on any balance then outstanding, from the 13th month on te rms
of the Public Finance Management Act's provisions on interest to be
levied on debts owing to the state.
5.2.1 The first payment of R3 000 000 shall be made within 30 days of
the confirmation of the Consent Agreement as a consent order by
the Tribunal.
5.2.2 The second payment of R3 000 000 shall be made by no later
than 12 months after confirmation of the Consent AGREEMENT
AS A CONSENT ORDER BY THE Tribunal; and
5.2.3 the third instalment of R2 674 252.58 (which includes the interest
at the prescribed rate of 10.25% on the outstanding amount from
the 131h month) shall be made by no later than 24 months after
confirmation of the Consent Agreement as a consent order by th e
Tribunal.
5.3 The payments shall be made into the Commission's bank account,
details of which are as follows:
Bank name: Absa Bank
Branch name: Pretoria
Account holder: Competition Commission Fees Account
Account number: [….]
Account type: Current Account
Branch Code: 632005
Reference: Case Number: 2014Aug0465/Plasser
5.4 The penalty will then be paid over by the Commission to the National
Revenue Fund in accordance with section 59(4) of the Act.
6 AGREEMENT REGARDING FUTURE CONDUCT.
6.1 Plassar..undertakes to refrain from engaging in conduct contravention of
section 4(1)(b) of the Act in future.
6.2 Plasser shall implement and monitor a competition law compliance
programme. Such programme shall incorporate corporate governance
designed to ensure the employees, management, directors and agents
do not engage in future contraventions of the Act. In parti cular, such
compliance programme will include mechanisms for the monitoring and
detection of any contraventions of the Act.
6.3 As regards the competition law compliance programme referred to
above, Plasser undertakes to submit to the Commission a copy the reof
within 90 days of confirmation of the Settlement Agreement as an Order.
6.4 Plasser shall circulate a statement summarising the contents of this
Consent Agreement to its managers and directors within 20 days from
the date of confirmation of this Consent Agreement by the Tribunal.
7 FULL AND FINAL SETTLEMENT
This Consent Agreement is entered into in full and final settlement of the
Commission's investigation under Case No. 2014Feb0048/2014Aug0465 and
upon confirmation as an order of the Tribunal, concludes all proceedings
between the Commission, Plasser and RAMCO relating to the conduct that is
the subject of the Commission’s investigation under Case No.
2014Feb0048/2014Aug0465.
ON BEHALF OF PLASSER
Dated and signed at ROODEPOORT on 23rd day of JANUARY 2018
For the Commission
TEMBINKOSI BONAKELE
Commissioner
Dated and signed at PRETORIA on 31st day of JANUARY 2018