Uncovered: Vast Electrification Cartel with Valuation Exceeding 5.6 Billion Rubles Spotted by FAS
In a significant development, the Federal Antimonopoly Service (FAS) has initiated a case against four Limited Liability Companies (LLCs) over suspected antitrust violations in tenders for the creation of railway infrastructure.
The companies under scrutiny are Contact Network Materials, Contact Network of Railways, Railway Electrification, and Scientific-Production Association 'Magistral'. These LLCs are suspected of concluding and implementing an anti-competitive agreement, which allegedly aimed to maintain prices on tenders for the supply of construction materials, cable products, electrical equipment, and other goods for railway electrification projects.
The tenders in question were held for the development of sections of the Baikal-Amur and Trans-Siberian railways, two of Russia's most critical railway networks. Preliminary estimates show that the total initial maximum contract prices amount to 5,616,337,758 rubles.
The case was initiated by the FAS, and if the LLCs are found guilty, they could face administrative fines under Article 14.32 of the Code of Administrative Offenses. The article under which the fines could be imposed is "Conclusion of an agreement restricting competition, or the performance of coordinated actions restricting competition, or the coordination of economic activities".
It is important to note that, at this stage, the search results do not provide information about the shareholders of the four accused LLCs.
This case marks a significant step in upholding fair competition in Russia's infrastructure development sector. The FAS's investigation underscores the importance of ensuring that tenders for public projects are conducted transparently and without undue influence.
As the investigation progresses, more details are expected to emerge, shedding light on the nature of the alleged agreement and its potential impact on the cost and quality of railway infrastructure projects in Russia. The FAS's decision to pursue this case sends a clear message that such violations will not be tolerated and that companies found guilty will face consequences.
