OREANDA-NEWS. March 25, 2011. The Federal Antimonopoly Service (FAS Russia) found that the Housing and Utilities Committee of Veliky Novgorod City Authority (the Committee) and “Novogordsky Vodokanal” Municipal Unitary Enterprise violated Article 16 of the Federal Law “On Protection of Competition”, reported the press-centre of FAS Russia.

The Committee and “Novogordsky Vodokanal” Municipal Unitary Enterprise entered into an agreement that restricted competition at an open auction for the right to conclude a municipal contract for the water supply works to Derevyanitsky Residential Development.

In course of an antimonopoly investigation, FAS Russia established that the Committee and “Novogordsky Vodokanal” Municipal Unitary Enterprise entered into an agreement for secure storage of the working documentation for construction of a first stage pumping station, as a result of which “Novogordsky Vodokanal” Municipal Unitary Enterprise received construction documentation several months prior to the auction.

“Members of the Commission investigating the case concluded that due to this agreement “Novogordsky Vodokanal” Municipal Unitary Enterprise was given an advantage in relation to other auction bidders, and it limited access of other bidders to the process of competitive bidding and restricted competition”, said Alexander Kinev, the Head of the FAS Russia’s Cartel Department.

As a result, the auction was recognised void and the municipal contract was concluded with “Novogordsky Vodokanal” Municipal Unitary Enterprise at the initial (maximum) contract price - 330,000,000 Rubles.

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Article 16 of the Federal Law “On Protection of Competition” prohibits agreements between the authorities and economic entities if such agreements lead or can lead to preventing, eliminating or restricting competition.