FAS responds to unreasonable criticism from “Transneft”

02-05-2017 | 16:40

Due to some publications in mass media regarding a letter from “Transneft” PJSC to the antimonopoly body, FAS would like to refute the company’s arguments.

Regarding criticism of FAS work in the course of an investigation against “Novorossiysk Commercial Seaport” OJSC (“NCSP” PJSC), FAS reminds that it recognized that “NCSP” PJSC and its subsidiary “Primorie Commercial Port” Ltd. had violated the antimonopoly law in the part of fixing and maintaining monopolistically high prices for cargo transshipment services.

The companies were issued an injunction to stop the violation while “NCSP” PJSC was also given an injunction to transfer 9.8 million Rub of unlawfully obtained income to the federal budget. If the company disagrees with FAS decision, it can file a lawsuit and appeal the decision.

The arguments of FAS acting in the interests of “Rosneft” NK” PJSC in considering the issue of normative losses in oil transportation also are not correct since the investigation was initiated by a complaint filed by “Rosneft” NK” PJSC in full compliance with the law of the Russian Federation. Analyzing the complaint, FAS requested documents, information and explanations from the Ministry of Energy and “NCSP” PJSC as well as directly from “Rosneft” NK” PJSC. It should be pointed out that having analyzed the complaint, FAS refused to open a case on “NCSP” PJSC violating the Federal Law “On Protection of Competition”.

Statements on FAS being biased with regard to pipe procurement for main pipelines by “NCSP” PJSC, the notice of which was published on 30 March 2017, are also groundless. FAS letter sent to the company on 24 April 2017 mentions particular violations of requirements and documents regulating procurement, including:

  • Breaching No. 223 Federal Law “On procurement of goods, works, services by particular types of legal entities” of 18.07.2011 in the part of choosing a procurement method
  • Absence of accurate data on the volume of pipe procurement for main oil pipelines as well as information on the location, goods supply conditions, which also violates No. 223 Federal Law and contains signs of administrative violations
  • Absence of technical conditions, set by documentation, in open access, which does not allow potential procurement participants to form their technical proposals
  • Combining pipes of different nomenclature in the same lot
  • “NCSP” PJSC also violated the principles of No. 223 Federal Law.

Based on the above, the antimonopoly body in its letter to President of “NCSP” PJSC, N. Tokarev, asked to review the procurement conditions and adjust documentation in line with the Law on procurement and the regulations of “NCSP” PJSC on procurement.

Another incorrect argument quoted by mass media is that FAS refused to consider a draft law “On main pipeline transport of oil and oil products”. FAS studied in detail the draft Federal Law and concluded that its provisions duplicate the norms formalized in other federal laws, for instance, in the Federal Law “On Protection of Competition”, the Federal Law “On Natural Monopolies”, the Federal Law “On the Electric Power Industry” as well as acts of the Government of the Russian Federation devised under the frame of those Federal Laws*.

According to FAS, the current regulatory framework for transportation of oil and oil products via main pipelines is sufficient and does not require a special federal law. It should be noted that “NCSP” PJSC is not a subject of legislative initiative.

Thus, FAS believes that the criticism against the work of the antimonopoly body is unconstructive and unreasonable. At the same time, FAS expresses its readiness for cooperation and interaction with “NCSP” PJSC towards further improvement of the companies operations.

* No. 218 Decree of the Government of the Russian Federation “On non-discriminatory access to the services of natural monopolies on oil (oil products) transportation via major pipelines in the Russian Federation and  invalidating some acts of the Government of the Russian Federation” of 29.03.2011, No. 90 Decree of the Government of the Russian Federation “On the procedure for connecting oil production facilities to major oil pipelines in the Russian Federation and accounting the subjects of business activity involved in oil production” of 17.02.2011, No. 1039 Decree of the Government of the Russian Federation “On the procedure for connecting oil refineries to major oil pipelines and (or) oil products pipelines and accounting oil refineries in the Russian Federation” 21.12.2009, No.980 Decree of the Government of the Russian Federation “On state regulation of tariffs for services of natural monopolies for oil and oil products transportation” of 29.12.2007.