ARBITRATION COURT CONFIRMED LEGITIMACY OF A DECISION MADE BY SARATOV OFAS

The latter allocated subsidies to unlawfully compensate the costs for repair and maintenance of power lines for outdoor lightening

Earlier Saratov OFAS found that Saratov Authority violated the Federal Law “On Protection of Competition”. The latter passed a Decree to unlawfully grant subsidies in order to compensate the costs of upkeep, maintenance and routine repair of municipal cable and overhead power transmission lines for outdoor lightening.

The case was opened upon recommendations from Saratov Regional Prosecutor’s Office.

Investigating the case, the FAS Commission found that following the Decree, Saratov Authority had been granting subsidies to compensate the costs of upkeep, maintenance and routine repair of power lines for outdoor lightening. Since such works are considered of local significance, their financing should be executed in line with the Law on contractual system. Saratov Authority, however, failed to organize competitive bidding, and granted a 50-million RUB subsidy to a single entity – “Sargorsvet” Municipal Unitary Enterprise.

Saratov OFAS issued a warning to Saratov Authority to stop actions (omissions) that contain elements of violating Part 1 Article 15 of the Federal Law “On Protection of Competition”.

As Saratov Authority failed to undertake the measures within the deadline to restore the lawful conditions, OFAS opened proceedings against it upon signs of violating the Federal Law “On Protection of Competition” and found that Saratov Authority breached Part 1 Article 15 of the Federal Law “On Protection of Competition”.

Saratov Authority disagreed with the decision of Saratov OFAS and attempted to appeal. Courts of three instances, however, dismissed the claim and supported the OFAS decision.