CCI Dismisses Allegation of Bid Rigging in Railway Track Maintenance Market

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Mar 31, 2020

CCI Dismisses Allegation of Bid Rigging in Railway Track Maintenance Market

On February 5, 2020, CCI dismissed a complaint by Plasser India Private Limited (‘Plasser’) against Harbour Sales Private Limited (‘OP-1’), Alpha National Trading Co. (‘OP-2’) (‘OP-1 and OP-2 are collectively referred to as ‘Indian companies’), CRCC High-Tech Equipment Corporation Limited (‘OP-3’), Hubei Srida, Heavy-Duty Engineering Machinery Co. Limited (‘OP-4’), Ministry of Railways, Union of India (‘OP-5’) and Oriental Hengtai (Taian) Machinery and Electronic Technology Co. Limited (‘OP-6’) (OP-3, OP-4 and OP-6 are collectively referred to as ‘the Chinese companies’), alleging inter alia contravention of the provisions of Section 3(3) of the Act[1].

Plasser is engaged in the manufacture of high performance and highly sophisticated machines for track maintenance, track-laying and track renewal. The Indian companies and the Chinese companies are engaged in developing track maintenance machinery market.

The Ministry of Railways invited bids for the supply of Dynamic Track Stabilizing Machine through a tender that specified that an agent could represent or quote on behalf of only one firm. Plasser claimed that tender conditions were violated since the Indian companies acted as agents for the Chinese companies. Moreover, there are common linkages between the Indian companies because of common directorship and partnership between members of one family.

It was alleged that the Indian companies and the Chinese companies entered into an anticompetitive agreement, and the Chinese companies should have been more diligent in appointing their agents. It was further alleged that they tacitly agreed to engage in anticompetitive conduct by appointing agents having common linkages, which gave rise to a potential risk of exchange of sensitive commercial information.

CCI dismissed the information, observing that the violation of the conditions in the tender did not amount to a violation of the provisions of the Act, and relied on In Re: Reprographics India v. Hitachi Systems Micro Clinic Pvt. Ltd.[2], to observe that in the absence of evidence, a mere possibility of collusion on the basis of common ownership of agents is not sufficient to order further inquiry.

[1] Case No.45 of 2019, order delivered on February 5, 2020. [2] Case No. 41 of 2018.

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