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Peru: Indecopi sanctions construction cartel

Christian Fernsby |
The sanctioned companies established an illegal mechanism for the distribution of 112 tenders called by the Ministry of Transport and Communications and Regional Governments from 2002 to 2016.

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The Indecopi Free Competition Defense Commission sanctioned, in the first administrative instance, the “construction cartel”, made up of 33 construction companies and 26 of its executives for having adopted a secret coordination system (cartel) to distribute various tenders convened by Provías of the Ministry of Transportation and Communications, and other State entities, for the execution of road works nationwide.

As established by the Peruvian Free Competition Law, one of the most serious forms of anticompetitive conduct are the agreements between bidding companies not to compete and, instead, distribute the bids that the State calls for the contracting of goods and services.

This type of illegal conduct generates excessive expenses for the State, because the bidders stop competing to obtain the good bid, increasing the value of their proposals.

On November 15 of this year, the Commission confirmed that 33 construction companies were part of the cartel and maintained an agreement for the illegal distribution of tenders between November 2002 and December 2016.

According to the Commission, during this period the offending companies agreed to distribute 112 public procurement processes for the construction, improvement, rehabilitation and maintenance of highways in the country. The sum of the amounts awarded in the investigated works was over 14 billion soles (3,081,806,000.00 euros).

For this reason, the Commission for the Defense of Free Competition resolved to sanction the companies with fines that reach a total of 624,891.50 UIT, equivalent to more than S 2,749,000,000 (605,134,621.00 euros). The 26 executives involved in the infringement were fined a total of 1,531.3 UIT, equivalent to more than S 6.5 million (1,474,864.30 euros).

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