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OFAS exposed a cartel in construction of gas pipeline in Priozersk, Russia

Staff Writer |
The Commission of Leningrad OFAS found that "SZI-KOMPLEX" Ltd. and"Stroitechnocom" Ltd. formed a cartel (a violation of Clause 2 Part 1 Article 11 of the Federal Law "On Protection of Competition").

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Experts of the antimonopoly body established that those economic entities entered into an anticompetitive agreement that resulted in maintaining prices in the course of an electronic auction for the right to sign a contract to carry out the facility construction works:"Natural gas supplies to Priozersk.

"Distribution networks (I, II, III, IV, V stages). II – stage," carried out by the Regional Public Procurement Committee in 2015. The initial (maximum) contract price was 34,75,040.00 RUB.

At the auction the contract price reduced only by 1%. This fact and other circumstances formed the grounds to arrive to a conclusion about the cartel created by the companies.

As a result by inspections, Leningrad OFAS found that the economic entities repeatedly took part in auctions together and in all cases of joint participation bids were filed from the same IP-addresses. In the analyzed auction bids also were filed from the same IP-addressed assigned to"SZI-KOMPLEX" Ltd.

Leningrad OFAS also inspected auction documentation, including the bids. Three organizations took part in the auction."SZI-KOMPLEX" Ltd. that became the winner with 1% reduction of the initial contract price,"Stroitechnocom" Ltd. that was on the second position with 0.5% price reduction and the branch of"Gazprom Raspredelenie" in Vyborg, the Leningrad region, which bid was rejected.

The OFAS Commission noted that the content of No.2 Appendixes to the first parts of the bids of"Stroitechnocom" Ltd. and"SZI-KOMPLEX" Ltd. was fully identical.

Both appendixes had the same number of words, signs, lines, paragraphs, the date of creating and the date of last saving. No.2 Appendix to the first part of the bid of the third participant had different format and content.

Both companies did not admit collusion but failed to present any evidence proving their innocence in the course of the investigation. For instance, representatives of"Stroitechnocom" Ltd. did not attend the case hearings at all, while"SZI-KOMPLEX" Ltd., explaining such matching, claimed that their bid was stolen from a hacked email box and filed to the auction from the corporate ip-address by connecting to an unprotected Wi-Fi.

The Commission of Leningrad OFAS was not satisfied with such explanations. As a result the Commission found that"SZI-KOMPLEX" Ltd. и"Stroitechnocom" Ltd. violated Clause 2 Part 1 Article 11 of the Federal Law"On Protection of Competition".

The case materials will be transferred to an authorized official to open administrative proceedings.

Gleb Konnov, Deputy Head of Leningrad OFAS commented the case:"Under the frame of the administrative proceedings we will determine the size of the fine to be imposed on the respondents to the case.

Since cartels are especially dangerous economic offences, harming consumers as well as business and the national economy in general, we probably are going to transfer the case materials to the law enforcement bodies to open a criminal case against the above legal entities under Article 178 of the Criminal Code".

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