Parliament works under urgency while protests take over its lawns, safety concerns after mega-ferries project gets scrapped and why Israel’s becoming increasingly isolated on the world stage in the latest NZ Herald headlines.
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The Commerce Commission announced on Tuesday it has filed criminal charges against two construction companies and twodirectors for alleged bid-rigging of publicly funded projects, calling it “the country’s first-ever criminal prosecution for cartel conduct”.
The charges follow a commission investigation into allegations the companies and their directors colluded to rig bids for infrastructure projects in Auckland.
The commission did not provide other details, but a highly placed source told the Herald the case relates to work being carried out for New Zealand Transport Agency Waka Kotahi (NZTA) by two large construction firms.
The source said the alleged offending had nothing to do with NZTA or the two large construction firms, but two subcontractors.
Yesterday, Judge Brooke Gibson made an interim suppression order for one of the accused directors and companies until the first appearance in court.
Cartel charges carry a maximum sentence of seven years in prison or a fine not exceeding $500,000 for the directors, and a fine not exceeding $10 million for the companies. Cartel conduct was introduced to the Commerce Act in 2021.
Commerce Commission chairman John Small. Photo / Mark Mitchell
Bid-rigging is defined as when there is agreement among bidders about who should win a tender to support the proposed winner, or bidders agree on the prices each party will bid.
Commerce Commission chairman John Small said cartel conduct harms consumers through higher prices or reduced quality and harms other businesses that are trying to compete fairly.
“Bid-rigging of publicly funded construction contracts loads extra costs on to taxpayers and the New Zealand economy, as conduct of this type undermines fair competition.”
Small said the criminal proceedings filed in the Auckland District Court send a strong message to businesses that the commission will not tolerate cartel conduct and is prepared to lay criminal charges.
The cartel allegations are not the first case targeting Auckland contractors.
Six years ago, two men were jailed in the country’s largest bribery case, brought by the Serious Fraud Office (SFO).
The pair had been found to have engaged in a seven-year corrupt relationship in which Projenz would make regular payments to Noone, overall amounting to more than $1 million, while the latter was employed at council-owned organisations (CCOs) overseeing contracts awarded to Borlase’s firm.
Barrie George, Noone’s deputy throughout the corrupt relationship, had earlier pleaded guilty to accepting bribes from Borlase - mostly in the form of 20 international holidays - and was sentenced to 10 months’ home detention.
The Herald also revealed Noone, Borlase and George were not the only casualties of the road maintenance case, with six other AT staff departing under a cloud after an internal investigation began in 2013.
Richard Motilal, who was a director of Engineering and Aviation Supplies, admitted three charges of corruptly giving gifts to an agent in February.
Motilal was one of four subcontractors prosecuted by the SFO over the alleged kickback scheme, along with Broadspectrum roading contract manager Jason Koroheke.
Koroheke, who has pleaded not guilty, is alleged to have benefited by more than $1m.
Frederick Pou and Jeanette Pou, the directors of Coastal Roading Contractors, and another subcontractor who has name suppression, have also pleaded not guilty.
They are due to stand trial alongside Koroheke in July next year.
Bernard Orsman is an Auckland-based reporter who has been covering local government and transport since 1998. He joined the Herald in 1990 and worked in the Parliamentary press gallery for six years.
