AdC adopts sanctioning decision which concludes proceedings against railway maintenance companies with a total fine of €3.4 M and disqualification of participation in public tenders

Press Release 02/2020
 
AdC adopts sanctioning decision which concludes proceedings against railway maintenance companies with a total fine of €3.4 M and disqualification of participation in public tenders
 
The AdC (Portuguese Competition Authority) today adopted a sanctioning decision that concludes the process initiated in 2016 which resulted in a total fine of €3.4 million imposed on five companies and five board members or directors involved in a cartel in railway maintenance in public tenders launched by Infraestruturas de Portugal in 2014 and 2015.
 
The AdC fined Fergrupo - Construções e Técnica Ferroviárias, SA and Somafel - Engenharia e Obras Ferroviárias, SA, as well as a board member or director of each company, to pay fines totaling €1.8 million for participating in the cartel.
 
Taking into account the significance of the infractions and the prevention of this type of practices, the AdC also applied an accessory sanction that disqualifies these two companies from participating for two years in contracting procedures aimed exclusively at the purchase of maintenance services for track equipment, on the national rail network.
 
In relation to the remaining three companies, i.e. Futrifer - Indústrias Ferrovárias, SA, Mota-Engil - Engenharia e Construção, SA and Sacyr Neopul SA, the AdC had decided earlier, between December 2018 and June 2019, in settlement procedures, in which the companies admit fault and agree to waive their right to continue with judicial proceedings, to fine them in a total amount of €1.6 million.
 
Fergrupo and Somafel, now sanctioned, did not used the settlement procedure.
 
The five companies, providers of railway maintenance services, manipulated for their benefit the proposals presented in the tenders listed by Infraestruturas de Portugal, the public company that manage Portuguese railways,  revealed the AdC investigation.
 
The five companies agreed to make the tenders void due to the lack of participants, so that new tenders could be launched with a higher base price, and then divided the market in the next tender procedure, placing a higher price.
 
Thus, in September 2018, the AdC accused the five companies, following a complaint filed in the context of the Combat Bid-Rigging in Public Procurement campaign that the AdC has promoted, since 2016, involving contracting entities and entities with supervisory functions and of monitoring public procurement procedures.
The Competition Law expressly prohibits cartels, which are agreements between firms that restrict competition, by their nature in a significant manner, in all or part of the national market, thereby reducing the welfare of citizens. 
 
Combatting cartels remains a top priority for the AdC, taking into account the losses that they invariably cause to citizens and to businesses, subjecting them to higher prices and reduced quality and variety of goods and services.
 
The infringement of competition rules not only reduces consumer welfare, but also weakens the competitiveness of companies, undermining the economy as a whole.
 
 
Lisbon, March 4  2020