Anti-competitive practices in power sector: CCP raids on offices of four companies suspected of bid rigging in tenders

ISLAMABAD: In a major enforcement action to curb anti-competitive practices in the power sector, the Competition Commission of Pakistan (CCP) conducted simultaneous raids on the offices of four companies suspected of bid rigging in tenders for the supply of transformer reclamation material to power distribution companies (DISCOs).

The coordinated raids were carried out by CCP’s authorised officers in Lahore and Gujranwala, targeting suppliers who are alleged to have colluded in manipulating the bidding process. These companies were found to be quoting identical prices and engaging in tender rotation — a classic hallmark of cartel behaviour.

The action follows a formal complaint lodged by the Lahore Electric Supply Company (LESCO), which observed suspicious bidding patterns in recent procurement cycles. LESCO reported that multiple firms submitted bids with identical rates for various items, raising red flags regarding possible collusion. In response, the CCP initiated a formal enquiry under Section 4 of the Competition Act, 2010, which prohibits agreements that restrict competition, including bid rigging under Section 4(2)(e).

A preliminary analysis of the bidding data revealed that certain companies appeared to be coordinating their bids to ensure pre-determined outcomes in tender awards. In some cases, these suppliers were found rotating their wins while maintaining price parity, thereby undermining the competitive tendering process and harming public procurement efficiency.

This is not the first time CCP has uncovered such practices in the transformer materials market. In 2020, the Commission concluded a similar enquiry involving bid rigging by multiple vendors supplying transformer bushings and reclamation items to DISCOs, including LESCO, MEPCO, and GEPCO. In that case, CCP found collusion among at least five firms, and imposed significant penalties.

The recurrence of such practices underscores systemic vulnerabilities in the public procurement mechanisms of the power sector and the need for stronger oversight by procuring agencies.

If the ongoing investigation confirms collusive conduct, the Commission is empowered to issue show-cause notices to the implicated firms and proceed with hearings. Upon establishing contravention, CCP may impose penalties of up to 10% of annual turnover or PKR 75 million, whichever is higher.

In addition, the Commission can recommend structural or behavioural remedies to prevent recurrence and restore market integrity.

The CCP has urged the public, including procurement officers, business insiders, and concerned citizens, to come forward with credible information about cartelization or bid rigging. The Commission’s Whistleblower Reward Scheme offers cash rewards ranging from PKR 200,000 to PKR 2 million, based on the quality and value of the information provided.

Copyright Business Recorder, 2025