CCI dismisses allegations of cartelisation against Unipro Techno Infrastructure and others

CCI dismisses allegations of cartelisation against Unipro Techno Infrastructure and others

The Competition Commission of India (CCI) said that there was nothing on record wherefrom it could even form a prima facie view regarding contravention of the provisions of Section 3 of the Act.

The Competition Commission of India (CCI) has dismissed and closed a complaint on 29 December 2020 about cartelisation in inviting tenders by the Public Health Engineering Department, Rajasthan under Atal Mission for Rejuvenation and Urban Transformation (AMRUT).

The Information filed by Piyush (Informant) under Section 19(1)(a) of the Competition Act, 2002 (Act) against Unipro Techno Infrastructure Private Limited and others (Opposite Parties) alleging violation of the provisions of Section 3 of the Act has been dismissed and the matter has been ordered to be closed forthwith in terms of the provisions of Section 26(2) of the Act.

Herein, the Informant had alleged cartelisation by the OPs in certain tenders invited by the Public Health Engineering Department, Rajasthan (PHED Rajasthan/Department) under AMRUT.

The Informant had alleged that out of 21 districts where projects were undertaken under AMRUT mission drinking water project, the tenders invited by the PHED Rajasthan in 11 districts were rigged by the OPs to force the Department to revise the tender in these districts at 20 per cent to 30 per cent higher rates than the earlier estimated cost. It was also alleged that the OPs refused to compete with each other and divided the 11 districts amongst themselves.

The Informant had prayed for certain reliefs i.e. to declare the practice of the OPs as anti-competitive in violation of the provisions of Sections 3 of the Act; to pass a cease and desist order against the OPs; to pass an order under Section 26(1) of the Act directing investigation in the matter and impose penalty along with a direction to blacklist the said companies/firms of the OPs under the Act.

The Competition Commission mainly opined that the Information furnished by the Informant indicated that the allegation of cartelisation in the instant case pertained to the tenders floated for projects under AMRUT Mission in the 'water supply sector' by the State of Rajasthan.

However, the only material provided by the Informant in support of his allegations were news reports/articles appearing in various newspapers/social media. It was noted that the said news reports/articles were primarily regarding the issue of corruption in PHED/Water Supply Department in relation to water supply projects under AMRUT Mission in Rajasthan and raised issues such as slowing down of the pace of development by contractors due to non-payment, quality of work done by the contractors, project work being given at a rate 20 per cent higher than the tender cost to the contractors despite issues related to quality and pace of work, etc.

In addition to the news reports, the Informant had also annexed certain other documents such as document showing details of projects taken up under AMRUT Mission in Rajasthan in sectors such as water supply, sewerage, drainage and green space; letter granting work order to OP-2 on 11 December 2017 and Minutes dated 1 February 2017 of the 8th meeting of State Level Technical Committee under AMRUT Mission held on 27 January 2017.

It was, however, observed that these documents did not support the allegations of bid-rigging made by the Informant in any manner. Further, the Commission noted that the Informant had provided certain information in a tabular manner to show alleged cartelisation amongst the OPs in dividing the 11 districts amongst themselves besides escalating the costs by 20 per cent.

It was, however, not readily discernible therefrom that such allocation was an outcome of any collusive conduct of the part of the OPs. As regards the allegation of uniform escalation in costs by 20 per cent for each district is concerned, it appeared to be an outcome of negotiations by way of offers and counteroffers with the Department, as was borne out from the averments made in the Information itself.

The Informant had not filed any material to support that such increase in costs was a result of any prior concert amongst the bidders and the allegations in this regard seemed to be based on the surmised deduction of the Informant from the allocations.

Based on the above, the Commission was of the opinion that there was nothing on record wherefrom Commission could even form a prima facie view regarding contravention of the provisions of Section 3 of the Act by the OPs.