CCI slaps Rs 62.31 cr penalty on three companies in Indian Railways tender case

Feb 06 2014, 21:04 IST
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The three companies have also been directed to “Cease and Desist” from indulging in such anti-competitive conduct in future. Reuters The three companies have also been directed to “Cease and Desist” from indulging in such anti-competitive conduct in future. Reuters
SummaryThe penalty has been imposed after CCI took up a case of suo motto basis based on information by the complainant.

Finding them guilty of cartelisation with respect to a tender for an Indian Railway undertaking, the Competition Commission of India (CCI) has imposed a penalty of Rs 62.31 crore on three engineering companies. The penalty was imposed based on a complaint made by Diesel Loco Modernisation Works(DLMW), a unit of Indian Railways at Patiala, Punjab.

According to an official statement, CCI imposed a penalty of Rs 54.70 crore on Escorts Ltd; Rs 1.91 crore on Stone India Ltd and Rs 5.70 crore on Faiveley Transport Rail Technologies. "The penalty has been worked out on the basis of 2% of average turnover of these companies for the three financial years from 2009-10 to 2011-12," the statement said.

"The penalty has been imposed after CCI took up a case of suo motto basis based on information by the complainant. The case relates to a DLMW tender wherein the three vendors quoted identical rates for feed valves," it added.

The three companies have also been directed to “Cease and Desist” from indulging in such anti-competitive conduct in future. Noting that public procurement is a major concern of all competitive authorities in the world, CCI said that it cannot ignore bid rigging in case of small procurement nor can consider small procurements unimportant.

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