OREANDA-NEWS. September 20, 2011. The Commission of the Federal Antimonopoly Service (FAS Russia) found that the group of persons comprising “Russian Railways” OJSC and “First Non-Ore Company” OJSC violated Part 1 Article 10 Federal Law “On Protection of Competition” by preventing entry of producers of granite chipping to the market, reported the press-centre of FAS Russia.

On 17th February 2011, FAS initiated a case against “First Non-Ore Company” OJSC upon petitions received by FAS from the Chairman of the Board of Directors “Pavlovskgranit” OJSC and “Nedra” Association. The petitioners described possible signs of antimonopoly violation in course of prequalification for the contracts for supplying chipping products to “Russian Railways” OJSC в 2010–2013.

Investigating the case, FAS analysed the market of granite chipping and established that only 25 60 mm fraction chipping can be used in construction of rail track ballast bed (State Standard 7392-2002 “Compact rock chipping for rail track ballast bed”).

The largest consumer of granite chipping of this fraction in the Central and North-West Federal Districts in 2009–2010 was “Russian Railways” OJSC - market share over 50%.

The FAS Commission established that actions of the group of persons comprising “Russian Railways” OJSC and “First Non-Ore Company” OJSC in course of prequalification restricted entry of producers of granite chipping to the market. Based on the prequalification, only intermediaries that resell the products with considerable mark-ups were allowed to supply chipping products in 2010–2013.

"Such actions have undermined efficiency of the tenders for buying chipping for the needs of “Russian Railways” OJSC, and, consequently, increased the costs of the holder of natural monopoly, which ultimately are included in the tariffs”, said the Head of FAS Department for Control over Industry and Defence, Maxim Ovchinnikov.

Reference:

Chippings that meet the State Standard 7392-2002 “Compact rock chipping for rail track ballast bed. Technical conditions” are used in construction of rail track ballast bed. It is inorganic granular bulk material with the nominal grain size 25 60 mm, produced by fragmenting ingenious rocks and screening the fragmented products. Other chipping types and fractions cannot be used in rail track ballast bed.