FAS SUSPECTS ELEMENTS OF AN ANTICOMPETITIVE AGREEMENT IN ACTIONS OF THE GOVERNMENT OF THE PERM REGION

Measures undertaken by the regional authority could have resulted in concerted actions in the course of choosing a regional operator for solid municipal waste treatment

FAS opened a case against the Government of the Perm region in July 2019 upon the totality of the elements of violating the antimonopoly law of the Russian Federation.

For example, according to FAS data, on 24 July 2018 a notice on competitive selection of a regional operator for solid municipal waste treatment in the Perm region was published on the official web-site www.torgi.gov.ru. To avoid disruption of competitive bidding, the law provides for an application security mechanism, i.e. particular amount of bidder’s funds is blocked as a guarantee of its participation and credibility of submitted information.

In the case in question, the security was 5% from the maximum allowed proceeds of the regional operator, which exceeds 211 million RUB.

The Government of the Perm region passed an order in the course of competitive selection of the regional operator for solid municipal waste treatment ¹ to increase the registered fund of a subordinate company “Teploenergo” Perm Regional State Unitary Enterprise by 231 million RUB. At the same time, the registered fund of the unitary enterprise was considerably lower (40.2 million RUB) on the date of publishing the documentation for selection.

Such actions of the regional authority gave the unitary enterprise a possibility to take part in competitive selection.

In October 2018, the Commission for competitive selection of a regional operator in the Perm region opened an envelop with a single application, and “Teploenergo” Perm Regional State Unitary Enterprise became the winner and an agreement was concluded with the company for organizing treatment of solid municipal waste in the Perm region.

Another fact exposed by FAS is that after competitive selection the earlier transferred 231 million RUB had been returned to the Government of the Perm region. The registered fund of “Teploenergo” reduced to its original level – 40.2 million RUB.

Deputy Head of FAS Vitaly Korolev pointed out: “It can indicate that the subsidy was granted specially to secure the participation in the tender. In view of the exposed facts, FAS interprets relations between actions of the regional Government – subsidizing “Teploenergo” – and the company winning the tender, that such actions can be signs of violating the Federal Law “On Protection of Competition”.

The antimonopoly body opened a case under Article 16 of the Federal Law “On Protection of Competition” ².

“Rigorous compliance with competitive procedures and independent organization of competitive selection by the authorities guarantee protection of the legitimate rights of economic entities, support for competition and saving budgetary funds”, commented Head of Department for Regulating the Housing-and-Utility Sector, Alexei Matyukhin.

Reference:

¹ No. 246-rp Order of the Government of the Perm region of 03.10.2018

²  Article 16 of the Federal Law “On Protection of Competition” prohibits agreements between federal executive bodies, the authorities of the regions (subjects) of the Russian Federation, local self-government bodies, other bodies and organizations exercising the functions of the above bodies as well as extra-budgetary funds, the Central Bank of the Russian Federation or between them and economic entities, or concerted actions between such bodies and organizations if such agreements or concerted actions lead or can lead to preventing, restricting, eliminating competition.