| Azlan Othman |
SECTOR regulators, competition officials and procurement officials must learn the types of competition issues in the construction sector and ways to mitigate anti-competitive practices causing inefficiency and inflated prices which in turn affects the government budget, the public and the economy said Minister of Development Dato Seri Setia Awang Haji Suhaimi bin Haji Gafar.
The minister made the statement during a dialogue session themed ‘Deterring Cartels in the Construction Sector to Enhance Growth and Consumer Welfare in Brunei Darussalam’ at the Ministry of Development (MoD) building yesterday.
The minister said the construction sector accounts for approximately 2.5 per cent of gross domestic product (GDP).
“This number may seem small, but it is a sector with great growth potential based on the rising number of businesses and public infrastructure projects besides the growing number of commercial properties,” said the minister. “Government spending is expected to reduce as the role of private sector increases. The government will outline various measures to spur private participation and enable the private sector to be the engine of growth. Tendering processes will be more competitive and Public-Private-Partnership (PPP) system will dominate procurements in the construction industry.
“With the establishment of the Competition Commission of Brunei Darussalam (CCBD) and the Department of Competition and Consumer Affairs in August last year to implement and enforce the Competition Order, 2015, the government is committed to promote economic efficiency, economic development and consumer welfare, through prohibiting anti-competitive conducts, such as cartels, price fixing, supply control and bid rigging,” added the minister.
The minister said the construction sector received attention by competition authorities, not just in the ASEAN region, but also in the OECD economies, with many case examples, ranging from price fixing in construction materials to bid rigging offences. This is mainly because of certain characteristics unique to this sector. Some of its features, including the market structure, homogeneous nature of the input (construction materials), bidding procedures and sub-contracting work involved, making cartel formation and other anti-competitive behaviours a high probability in this sector.
The minister hoped for more collaboration among the sector and the competition law regulator as well as the industry participants, to work together to tackle any potential market issues in the construction sector.
The session was organised by the Department of Economic Planning and Development (JPKE), Ministry of Finance and Economy (MoFE) through the Department of Competition and Consumer Affairs in collaboration with the MoD.
Led by competition experts from the Australian Competition and Consumer Commission and the University of Melbourne, the discussion focussed on the significance of the construction sector in the economy and potential competition issues which may arise in this sector.
Competition law practitioners shared their experience on ways to mitigate and deter anti-competitive practices in the sector, which if left unattended, may lead to inflated prices and limited choices affecting consumers’ well-being, government spending and potentially may affect the sustainability of the sector’s growth and the economy.
Chairman of the Competition Commission of Brunei Darussalam Dato Paduka Eddie bin Dato Paduka Haji Sunny and Deputy Minister of Development Haji Marzuke bin Haji Mohsin attended the session.
Permanent Secretaries at the the MoFE and MoD, members of the Competition Commission of Brunei Darussalam as well as senior officials from the MoD, the JPKE and the Attorney General’s Chambers were also present.