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Thu Oct 18 14:41:43 IST
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Blog Entry# 1071444
Posted: Apr 25 2014 (18:17)

1 Responses
Last Response: Apr 25 2014 (18:17)
Rail News
Commentary/Human Interest
NWR/North Western
Apr 19 2014 (14:32)   CCI orders probe into alleged cable cartel in North Western Railway bids

rdb*^   133339 news posts
Entry# 1071444   News Entry# 174185         Tags   Past Edits
MUMBAI: Fair trade regulator Competition Commission of India is investigating alleged cartelisation by 37 signaling cable manufacturers in the recent tenders floated by North Western Railway, according to documents reviewed by ET.In a complaint filed with the CCI recently, the chief material manager of North Western Railway, a division of state-run Indian Railways, had alleged that companies participating in tenders for procurement of signaling cables had acted in concert and quoted higher prices.Giving orders for a probe, the CCI said, "It is prima facie clear that OPs (opposite parties or bidders) have not quoted exactly similar price in response to any bid but the data provided with the information indicates that there was meeting of minds of the opposite parties while quoting rates in response to different bids." The CCI's investigation arm, the director-general of investigation, has initiated a probe following this order.
competition watchdog has also issued notices to all the 37 firms and asked the investigation officer to submit a report within two months.
According to railway officials, RS Lodha Group-owned Vindhya Telelinks, Birla Ericsson Optical, Rajasthan Transformers & Switchgears, Paramount Communication, SPM Power and Telecom, CMI, Tirupati Plastomatics, Continental Telepower and Delhi Telecom are among the 37 companies named in the complaint.
MP Telelinks (now MPI Machines), Vindhya Telelinks and Birla Ericsson Optical did not respond to email queries from ET. Phone calls to the other listed firms on the list remained unanswered.
Railway signaling cables are safety items and essential for gauge conversion, addition of rail lines and other tasks, according to the railways.
"Opposite parties quoted higher rates for railway signaling cable compared to the prevailing market rate, recent accepted rates of other railways and updated rates for each tender based on price variation clause (PVC) in response to various procurement tenders of NWR," the railway department had said in its complaint.
"This was an indication of absence of competitive bidding and formation of cartel by the OP."
As per the Competition Act, the maximum penalty for cartelisation is three times a company's profit or 10% of its turnover, whichever is higher.
The CCI order, referring to a particular tender for procurement of signalling cables for 662 km, said 14 companies participated in the bidding. "All of them quoted higher prices ranging from 8.2% to 8.63% compared to East Coast Railway's accepted rate in May 2013 and South Central Railway's accepted rate in April 2013."
"The basic rate updated in July 2013 was 1.32 lakh per km, whereas the participating firms quoted prices ranging from 1.43 lakh to 1.65 lakh," the railways alleged.
In its order, the regulator observed, "This behaviour of suppliers was alleged as cartel formation among suppliers who, after arriving at an understanding were trying to obtain higher rates from NWR."

1 Public Posts - Fri Apr 25, 2014

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