CCI imposes penalty for cartelisation

ST Correspondent
Sunday, 3 June 2018

Four private companies fined for colluding to win PMC development works tenders

Pune: There have been talks of cartels being formed to grab tenders of development works at the Pune Municipal Corporation (PMC). However, this was not established till recently. A directive from the Competition Commission of India (CCI) has exposed this practice. The CCI has penalised four companies bidding for solid waste processing plants proposed to be built by the PMC. It has been proved that these firms formed a cartel to win tenders for these proposed projects. 

This is considered to be the first such case in a civic body across the country. 

On Friday, the CCI imposed penalties on the firms - Sarra, Ecoman, Fortified and Raghunath - for their involvement in colluding for three tenders floated by the PMC for design supply, installation, commissioning, operation and maintenance of its organic and inorganic solid waste processing plants.

The CCI, a government agency, checks for an uncompetitive environment, which is artificially created by influential persons. The agency creates a level-playing field for all parties involved.

Suresh Jagtap, Head of Solid Waste Management Department, said, “The CCI has imposed penalties on the companies. The case dates back to 2015.”

Maj Gen SCN Jatar (retd), President of Pune-based NGO Nagrik Chetna Manch, had registered a complaint in 2015. He said, “We pursued the matter of collusion by companies in tenders floated for projects of the Solid Waste Management Department. We raised questions about the Rs 14.50 crore projects. They were awarded to the companies with the highest rates. These companies are currently running biogas plants of the civic body, but they have to pay penalties.”

He said, “It is for the first time that the CCI has imposed fines on companies for cartelisation in a municipal corporation in the country. It has proved that cartels are involved in development works in civic bodies.” 

According to the CCI, two tenders pertain to financial year 2013-14 while one tender pertains to financial year 2014-15. From the evidence gathered during the investigation, CCI found that there was collusive bidding in tender nos. 21 and 29 of 2013 and tender no. 59 of 2014 floated by the PMC for solid waste processing plants, in contravention of Section 3(3)(d), read with Section 3(1) of the Act, by way of submitting proxy/cover bids.

Now, Rs 46.45 lakh fine has been imposed on Saara Traders Pvt Ltd, Rs 33 lakh on Ecoman Enviro Solutions Pvt Ltd, Rs 11 lakh on Fortified Security Solutions and Rs 26.40 lakh on Raghunath Industry Pvt Ltd. 

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