OREANDA-NEWS. April 19, 2013. The Office of the Federal Antimonopoly Service in Moscow (Moscow OFAS Russia) filed a claim to Moscow Arbitration Court to invalidate an agreement for reconstruction of No. 1 Garbage Recycling Plant concluded by the Moscow Government without competitive procedures.

Earlier, Moscow OFAS Russia found that the Moscow Government violated Part 1 Article 15 of the Federal Law “On Protection of Competition” implementing an investment project for reconstruction of No. 1 Garbage Recycling Plant.

Investigating the case, the Commission established that in 2004there had been a tender for reconstruction of No. 1 Garbage Recycling Plant, an essential condition of which was the contract price (the amount of investments and refinancing of investor’s expenses from the Moscow budget), as well as technical characteristics of the plant (the volume of waste processing).

“Budagep-Budalux” Ltd. won the tender, investments reached around 176 million euro, the amount of refinancing — 270 million euro, the plant capacity — 360,000 tons of waste per year.

In 2009 and 2010, the Moscow Government decided to increase investments, refinancing as well as technical characteristics of the plant. As a result, the amount of refinancing of investor’s expenses increased to over 1 billion euro (from 270 million euro), and the plant capacity increased twofold (700,000 tons). Also, in 2010 the Moscow Government issued an order to transfer the rights of the investment project to a new investor, an agreement with whom was concluded without competitive procedures.

“Authorities cannot decide to change essential conditions of a contract concluded upon the results of competitive bidding and replace one investor with another. Such practice can adversely affect the state of competition on various markets, including the market of construction works. Thus, we will insist at Court on invalidating the agreement”, commented Deputy Head of Moscow OFAS Russia, Olesya Milchakova.