CCI fines 6 firms for ‘collusive bidding’ in PMC tenders

4/5/2018

PUNE: The Competition Commission of India (CCI) has imposed a collective fine of over Rs 6.17 crore on six firms for “bid-rigging” and “collusive bidding” in the online tendering process for installing wet garbage processing plants worth Rs 15 crore in Pune city during 2014-15. The six firms bagged the work order issued by the Pune Municipal Corporation (PMC).

In its May 2 order, the office of the director-general, CCI, said it had found evidence that the PMC had failed to detect “cartelisation” in its own tenders. “It is clear from the investigation that the PMC did not exercise due diligence while scrutinising the bid documents,” it said.

The CCI, the country’s fairplay watchdog, lists evidence against the PMC in its order such as uploading of online tenders from the same IP address, call data records of communication between some officials of the PMC with the bidders and other systemic failures on the part of the corporation to indicate that the PMC may have facilitated bid-rigging.

The PMC, however, was vehement in denying the involvement of its officials. Suresh Jagtap, head of the PMC’s solid waste management, said, “The CCI has imposed penalty on the six firms who were found to be at fault for cartelisation. PMC officials have not been found guilty during the investigation. The CCI’s office of the director general took statements of all the top officials of the PMC but they didn’t find anyone at fault,” he said.

The CCI was investigating a complaint filed by city-based charitable trust, Nagarik Chetana Manch (NCM), against irregularities in the tendering process. The PMC, through the issue of five tenders, had planned to install 13 thermal-composting plants for processing wet household garbage. In reality, it could execute only four tenders and gave a work order to install eight thermal composting plants worth Rs 15 crore. These plants, each with a capacity to process five tonne wet garbage, have been installed at Pashan, Vadgaon, Peshwe Park, Koregaon Park, Kharadi, Tarachand Hospital, Ghole road and Kasba Peth.

The CCI, however, later reduced the collective fine imposed on the six firms by 25%-50%, based on the quantum of their violations. The CCI order said all six firms confessed to “collusive bidding”.

Speaking to pune-news.com, Major General (retd) S C N Jathar of the NCM said, “The six firms revealed the modus operandi that helped one of them get the work order for the five tenders. The CCI’s order will help us to seek action against the PMC officials. We will approach the anti-corruption bureau to nail the officials at fault.”

Asked about the evidence listed in the CCI order, Jagtap said, “We don’t have mechanism to check whether the online forms were filed from the same computers and have the same IP address. Besides, we ensure deposit money in the form of demand draft but we don’t verify the account numbers. Besides, the calls were made by our officials, including deputy engineers and assistant commissioners, to follow up on the work. Those were official calls.”

Incidentally, the thermal composting plants installed by the PMC through these tenders were in news for the wrong reasons. The NCM had carried out a chemical analysis of the compost independently and found that it contained poisonous substances like chromium and mercury.