Court supported FAS in a bid-rigging case on procurement for transporting oil products in Chukotka

Moscow Arbitration Court pronounced legitimacy and reasonableness of FAS decision on a case against “Chukotsnab” State Unitary Enterprise of the Chukotka Autonomous District and “Polyarnaya Zvezda” Cooperative Association of Prospectors” CJSC.

In December 2015, the Federal Antimonopoly Service (FAS Russia) found that “Chukotsnab” State Unitary Enterprise of the Chukotka Autonomous District and “Polyarnaya Zvezda” Cooperative Association of Prospectors” CJSC violated Clause 3 Part 4 Article 11 of the Federal Law “On Protection of Competition” – companies concluded an anticompetitive agreement to make sure that the Cooperative Association of Prospectors would win procurement of services for transporting oil products by road transport, organized by a state-run enterprise - “Chukotsnab”.

To implement the agreement, “Polyarnaya Zvezda” and “Chukotsnab” set special restrictive requirements for haulers, particular, unyielding tender security and contract execution. The requirements were included in the procurement documentation, which ensured that the Cooperative Association of Prospectors won “Chukotsnab” procurements for the total sum over 800 million RUB.

“In 2014 – the first half of 2015 petrochemicals prices on the wholesale and retail markets in Chukotka were considerably overrated in comparison with the average figures for the Far East Federal District in the same period. For instance, retail prices for petrochemicals were overrated: for AI-95 – 12 RUB/l, АI-92 – 13.5 RUB/l, diesel fuel – 14.5 RUB/l. It had a significant impact upon buyers’ finances and adversely affected the economic situation in the region”, pointed out the Head of FAS Anti-Cartel Department, Andrey Tenishev.

Restoring procurement transparency in such a hard-access region as Chukotka stabilized the situation on the market of selling petrochemicals. For example, in the first six months of 2016 retail price for diesel fuel in the Chukotka Autonomous District decreased by 6.5 RUB/l.