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The Competition Council fines Two Construction Project Developers



On 31 July, the Competition Council (CC) of Latvia took a decision to fine two construction project developers – SIA „Sliežu transportbūve” and SIA „Komforta standarts” – for bid rigging. Both undertakings exchanged business data while participating in procurements of water development projects in the administrative municipality of Salacgrīva. The fine was set in the amount of 3% of 2013 net turnover of undertakings.

The infringement distorted competition within construction project development procurements of water management development in five Latvian villages – Jelgavkrasti, Tūja, Korģene, Svētciems and Liepupe. One of the participants of the prohibited agreement did win in three procurements. Procurements were organized by an undertaking of Salacgrīva city municipality – SIA „Salacgrīvas ūdens”. In addition, for the implementation of the procurement funding of the European Regional Development Fund was planned to be used.

The investigation was initiated after the claim/application of the Central Finance and Contracting Agency.

During the case investigation, the CC established that SIA „Sliežu transportbūve” and SIA „Komforta standarts” exchanged information concerning participation in procurements and prices offered. Thus, the organizer of procurements did not receive tenders, developed in a truly competitive environment.

Within the decision, the CC stresses that the content of the tender and, especially, prices and the time of the job execution may differ from a tender, submitted in a genuine competition, as the former could be more favourable to procurer.

Furthermore, the CC explains that undertakings can adapt themselves to market conditions and set prices according to costs and the chosen strategy. Though, any mutual contacts among undertakings with a purpose or consequences to affect actions of competitors or to reveal planned actions to competitors are prohibited. With knowledge of competitor actions, motivation of applicants to offer conditions, which are considerably more favourable than offered by competitors, is reduced.

The fine set to SIA „Sliežu transportbūve” was EUR 2510,07, while SIA „Komforta standarts” was fined at the amount of EUR 4689,75.