OREANDA-NEWS. March 06, 2012. Moscow Arbitration Court confirmed legitimacy of the decision and determination issued by the Federal Antimonopoly Service (FAS Russia) on the case of violating the antimonopoly law regarding the group of person including “Russian Railways” OJSC and “PNK” OJSC (“First Non-Metallic Company” OJSC), reported the press-centre of FAS Russia.

On 12th September 2011, the FAS Commission found that “Russian Railways” OJSC and “PNK” OJSC violated Part 1 Article 10 of the Federal Law “On Protection of Competition”, by preventing entry of granite macadam producers to the market.

The case was initiated upon petitions received by FAS Russia from the Chairman of the Board of Directors of “Pavlovskgranit” OJSC and the “Nedra” Association that described elements of possible antimonopoly violations in course of prequalification for the contracts for supplying macadam products for the needs “Russian Railways” OJSC in 2010–2013, organized by “PNK” OJSC.

Investigating the case, FAS analyzed the market of granite macadam and established that only macadam of 25-60 mm fraction (state standard – GOST 7392-2002 “Macadam from compact rock for rail ballast”) can be used to build rail ballast.

In 2009–2010 “Russian Railways” OJSC was the largest consumer of granite macadam of this fraction in the Central and North-Western Federal District with the market share over 50%.

The FAS Commission concluded that in prequalification the group of person including “Russian Railways” OJSC and “PNK” OJSC restricted entry of producers of granite macadam to the market. As a result of qualification, in 2010–2013 macadam products can be supplied mainly by intermediaries, who resell products with mark-ups.

“Being a dominant player on the market as a consumer, the group of persons of “Russian Railways” OJSC practically pushed direct macadam producers from the market for three years, as they were deprived a possibility to take part in tenders for supplying products for the needs of “Russian Railways” OJSC. In the future the mark-up of the intermediaries who passed qualification, will certainly be included in the tariffs, and, therefore, come upon consumers of the services of the natural monopoly”, pointed out the Head of FAS Department for Control over Industry and Defence Complex, Maksim Ovchinnikov.

“Russian Railways” OJSC disagreed with the FAS decision and filed a lawsuit to Moscow Arbitration Court. The Court dismissed the claim of “Russian Railways” OJSC, and upheld the FAS decision and determination.