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Case of collusion against ferry operators dismissed
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Case of collusion against ferry operators dismissed

Robben Island Museum tender collusion case dropped

SOUTH AFRICA: Two companies that ferry passengers between Robben Island and the V&A Waterfront tourist attractions in Cape Town have been cleared of price fixing and collusive tendering charges by the Competition Tribunal.

The case against Ferry Charters (Pty) Ltd and Heritage Charters CC related to a tender issued by the Robben Island Museum for bidders to be listed on its database as preferred service providers for a 12-month period.
 
The investigation
 
A Commission investigation, launched after the Museum lodged a complaint in June 2016, implicated a total of five companies in tender collusion. The other companies were Thembekile Maritime Services; Silverbuckle Trade 21 CC; and Nauticat Charters (Pty) Ltd.
 
The Commission claimed that the companies had met the previous year, to discuss and agree to increase the prices they would charge when responding to the tender.
 Subsequent to the meeting Thembekile and Nauticat Charters increased their prices to R18,000 per trip for 140 passengers. Ferry Charters did not alter its price as it was already charging R18,000 per trip for 140 passengers and this resulted in all three quoting the same price.
 
Silverbuckle increased its price per trip from R7,750 to R8,775 for a 65-passenger vessel while Heritage Charters raised its price per trip from R11,500 to R12,650 for its 65-passenger vessel.
 
Settlements
 
In June last year, three of the companies entered into settlement agreements with the Commission. Thembekile agreed to pay a R350,000.00 administrative penalty; Silverbuckle paid R249,171.72; and Nauticat Charters paid a penalty of R422,083.87.
 
Ferry Charters and Heritage Charters, however, denied the allegations and contended that the Commission had no case against them. They asked for the matter to be dismissed.
Ferry Charters argued that it did not increase its prices as alleged by the Commission simply because it had been charging the same price of R18,000 for the past four years. The price charged by Ferry Charters was generally known in the industry.
 
Heritage Charters’ defence was that prior to the tender it was in negotiations with Robben Island Museum to increase its price by 10%. The price in the tender reflected the very increase that he was seeking at the time and which the Museum had agreed to.  
 
The Commission’s only witness was a senior Supply Chain Manager at Robben Island Museum who served as the Secretariat to the Bid Evaluation Committee. The Commission did not call any witnesses from the boat companies that had settled with it and who were allegedly present at the coffee shop meeting, including a witness from Silverbuckle on whose statements the Commission relied to advance its case against both Ferry Charters and Heritage Charters.
 
Ferry Charters led the evidence of its manager and Heritage Charters closed its case without calling any witnesses on the basis that there was no case made out against it.
 
Tribunal findings
 
An excerpt from the Tribunal’s Order states: “The evidence taken as a whole does not allow us to draw the inference suggested by the Commission. The Commission did not call a witness who had direct knowledge of the events that took place at the coffee shop meeting. The pricing evidence led by Ferry Charters and Heritage Charters and confirmed by the Commission’s own witness does not lead to the inference that the respondents had colluded to increase prices for the RIM tender. Ferry Charters had been charging the same price for more than four years and submitted the same price in the tender. Heritage Charters had requested a 10% increase in its prices prior to the tender to which RIM had agreed. This was the price that had been submitted in the tender.
 
The Tribunal adds: “The Commission bears the onus to show that the respondents colluded as alleged at the coffee shop meeting of 22 September 2015 to increase prices for the RIM tender. We find that the Commission has not discharged its onus and has failed to show the existence of an agreement or concerted practice on the part of the respondents in contravention of s4(1)(b)(i) and(iii) of the Act.  The matter is accordingly dismissed…”

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