OREANDA-NEWS. April 09, 2012. The Federal Antimonopoly Service (FAS Russia) initiated a case against “Federal Passenger Company OJSC (“FPK” OJSC) upon the signs of violating Clause 9 Part 1 Article 10 and Part 1 Article 17 of the Federal Law “On Protecting Competition”. The company prevented entry of other economic entities to the market and exercised actions at tenders that lead or can lead to preventing, restricting or eliminating competition, reported the press-centre of FAS Russia.  

On 29th November 2011, “FPK” OJSC announced an open tender for a contract for the works on technical servicing and repair of electric and electronic equipment installed in all types of passenger cars in 2012 – 2026. Such works must be carried out in 53 wagon depots / sectors located in various provinces of the Russian Federation, which, according to the tender conditions, shall be rented out to the winner.

After the tender was announced, the documentation was changed, in particular, in the part of toughening qualification criteria for the bidders. One of such criteria was average annual experience of works similar to the tender subject, no less than 15% of tentative annual volume specified in the technical specification of the tender, which is nearly one billion Rubles.

One of the criteria for the bidders was availability of equipment, or possibility to purchase equipment in order to re-equip wagon depots and sectors to the level of technical regulations for the sum no less than 250 million Rubles without VAT.

Four economic entities filed the bids; the tender Commission found that three of them did not meet the criteria specified in the tender documentation. Therefore the tender was declared void, and “FPK” OJSC concluded a contract with the only participant allowed to bid – “Transremkom” Ltd.

According to FAS Russia, the set of requirements to tender bidders, the expected volume of works and the sum of necessary investments created insurmountable barriers for participating of a significant number of bidders in a tender. Transferring such considerable volume of works for such a long period to a single economic entity prevents entry of other economic entities to the market of repairing electric and electronic equipment in passenger cars and can result in restricting competition.

Reference:

Article 17 of the Federal Law “On Protecting Competition” prohibits actions that lead or can lead to preventing, restricting or eliminating competition in course of tenders, quotations requests.

Clause 9 Part 1 Article 10 of the Federal Law “On Protecting Competition” prohibits actions (omissions) of an economic entity with dominant position that have resulted or can result in preventing, restricting, eliminating competition and (or) infringing the interests of other persons, in particular, preventing market entry / exit of other economic entities.