NOVOSIBIRSK REGIONAL OPERATOR OF SOLID MUNICIPAL WASTE TREATMENT RESRICTEDT COMPETITION

“Ecology-Novosibirsk” Ltd. violated the Law “On Protection of Competition”

Monitoring zakupki.gov.ru, the antimonopoly body found that the company carried out procurement from the sole supplier for the services of transporting solid municipal waste in the Novosibirsk region, which is contrary to the Auction Rules*.

According to the Rules of auctions for collecting and transporting solid municipal waste in a particular region in the operation zone of the regional operator, separate lots are formed. Thus, the price for the service must be formed as a result of competitive procedures enabling to conclude contracts at economically justified value.

Investigating the case, FAS found that the regional operator organizing procurement with the specially chosen, sole supplier, created more advantageous conditions that proposed in the e-auction documentation.

For example, after the e-auction that was pronounced void due to absence of applications from market participants, “Ecology-Novosibirsk” Ltd. increased the contract price for the services of transporting solid municipal waste for 45.9 million RUB and concluded a contract with the sole supplier.

Also, contract conditions proposed at the e-auction contained a requirement on providing contract performance security in the form of bank guarantees. It equaled 20% of the initial (maximum) contract price.

In its turn, the contract concluded upon the outcome of procurement from the sole supplier specified 10% security, which is half of the auction security.

Therefore, the contract conditions infringe the legitimate rights and interest of the market participants and restricts competition.

Head of FAS Department for Regulating the Housing-and-Utilities Sector, Alexei Matuykhin pointed out: “FAS decision will encourage correct conduct of “Ecology-Novosibirsk” Ltd. selecting contractors, and serve as a preventative measure for other regional operators to comply with the law”.

“Observing the auction rules would support competition, particularly, for small companies, and as a consequence, efficient spending of the regional operator’s funds that are formed from tariff sources. Thus, conformity to the law enables fulfilling the National Competition Development Plan that provides for increasing the share of procurement from small business and setting economically justified tariffs, first of all, protecting consumer interests”, emphasized Alexei Matuykhin.

Administrative liability for violating the antimonopoly law is specified in the Code of the Russian Federation on Administrative Violations. A fine will be imposed when the administrative case is finalized.

Under the standards of the antimonopoly law, the company has the dominant position in the Novosibirsk region, as a result of which it can exercise influence in the market.

The consumers of the service rendered by “Ecology-Novosibirsk” Ltd. include the population and legal entities in the Novosibirskregion, who do not have a possibility to conclude contracts with other companies for the services of solid municipal waste treatment, since “Ecology-Novosibirsk” is the regional operator in this subject of the Russian Federation.

Reference:

* No. 1133 Decree of the Government of the Russian Federation "On approving the Rules of auctions based on which prices are formed on the services for transporting solid municipal waste for regional operators" of 3 November 2016