Collusive bidding in Pesco tender: CCP imposes Rs 10 million fine on five companies

The Competi-tion Commission of Pakistan (CCP) has imposed total Rs 10 million as penalty on five undertakings for engaging in collusive bidding in a tender of Peshawar Electric Supply Company. According to an announcement of the CCP here on Monday, the CCP issued its decision regarding the alleged collusive bidding in a Peshawar Electric Supply Company tender, concluding that five undertakings had violated Section 4 of the Competition Act, 2010 by participating in a collusive bidding arrangement in a 2009 tender.
The CCP imposed a sum of Rs 10 million on the five undertakings namely, Nam International (Pvt) Limited, Amin Brothers Engineering (Pvt) Limited, Creative Engineering (Pvt) Limited, M R Electric Concern (Pvt) Limited, and Redco Pakistan Limited for the violation.
The order was issued after conclusion of hearing into the matter by a two-member bench of CCP, comprising Abdul Ghaffar, Member (C&TA), and Dr Joseph Wilson, Member (MA&IA). Earlier, CCP had conducted a suo motu inquiry into the matter after a review of historical data related to Pesco's tenders raised suspicion of collusive bidding in a particular tender numbered ADB-PESCO-06-2009 LOT III for the procurement of 4759 High Tension Pre-stressed Concrete and 3678 Low Tension Pre-stressed Concrete poles.
The inquiry was completed vide a report dated 21 July 2010, which concluded that the above-mentioned five undertakings had collusively bid for the tender in question. The inquiry found that out of the five undertakings, four entered into a joint venture agreement to collectively bid for the tender, while the fifth submitted a 'cover bid' to give the impression of competitive bidding. On the recommendation of the report, CCP issued show-cause notices to the five undertakings on August 2, 2010.
The 'collusive bidding' is an area of priority enforcement for the CCP. This case is the third instance where CCP has taken strict action against undertakings involved in collusive bidding. Prior to this case, CCP had imposed fine of Rs 23 million and Rs 200 million on jute manufacturers and deep-sea dredging firms, respectively, for collusive bidding.