FAS ISSUED WARNINGS TO OFFICIALS OF ROSTOV-ON-DON TREASURY DEPARTMENT

The Department offered to lease municipal property to heating networks with out tendering

“Rostov-on-Don Treasury Department” Municipal Institution sent several letters to “Rostov Heating Networks” Ltd. offering to lease heating supply facilities without competitive procedures.

The Law on heating supply states that heating supply facilities in municipal property can be transferred on lease contracts concluded upon tender procedures [1]. Leasing technologically related heating supply facilities (under the law on urban development) is an exception [2].

Letters of Rostov-on-Don Treasury Department, however, do not give information that the objects propose for lease are technological related to “Rostov Heating Networks”.

Therefore, if Rostov-on-Don Treasury Department passes acts and (or) exercises actions to transfer such heating supply facilities on lease to “Rostov Heating Networks” Ltd. without tenders, FAS will investigate if there is a violation of the antimonopoly law.

In this context, FAS issued warnings to Director and Deputy Director of Rostov-on-Don Treasury Department on 28 October 2019 that actions, which can breach the Federal Law “On Protection of Competition”, are unacceptable [3].

“The objective of issuing warnings to the Treasury Department is to prevent possible violations and remind that leasing public and municipal property must take place on a competitive basis. Otherwise, FAS can initiate an antimonopoly case”, explained Deputy Head of FAS Vitaly Korolev.

Reference:

Clause 8 Part 1 Article 17.1 of № 135-FZFederal Law “On Protection of Competition” of 26.07.2006 (further on referred to as the  Federal Law “On Protection of Competition”) specifies that lease contracts for municipal property can  be concluded only based on the outcome of tenders or auctions for the right to conclude such contracts, except when granting the rights for such property to a person possessing the rights of ownership and (or) use of a utility network of the transferred property is part of a relevant utility network and these section of the network and the network are technologically related in accord with the law on urban development.

Under Part 1 Article 25 ofFederal Law “On Protection of Competition”, to prevent antimonopoly violations the antimonopoly body sends written warnings to executives of economic entities, officials of federal executive bodies, regional authorities, local self-government bodies, organizations involved in providing public or municipal services, state extra-budgetary funds that actions, which can lead to violations of the antimonopoly law are unacceptable.

В Under Part 2.1 Article 25 ofFederal Law “On Protection of Competition”, warnings to officials of federal executive bodies, regional authorities, local self-government bodies, organizations involved in providing public or municipal services, state extra-budgetary funds are sent upon information about actions (omissions) planned by such persons that can lead to violating the antimonopoly law, if at the same time there are no grounds to open and investigate an antimonopoly case.

[1] Parts 1, 5 Article 28.1 of 190- FZ Federal Law “On heating supply” of 27.07.2010

[2] Part 3 Article 28.1 of 190- FZ Federal Law “On heating supply” of 27.07.2010, Clause 8 Part 1 Article 17.1 of № 135-FZ Federal Law “On Protection of Competition” of 26.07.2006

[3] Part 1 Article 15 of № 135-FZ Federal Law “On Protection of Competition” of 26.07.2006