Staff Reporter
Islamabad
The Competition Commission of Pakistan (CCP) has issued show cause notices to 47 suppliers of Line Hardware Material to the Electric Power Distribution Companies (DISCOs) for prima facie operating as a cartel and engaging in collusive bidding in violation of Section 4 of the Competition Act 2010.
The CCP initiated a formal enquiry on a tip off from an informant regarding, prima facie, collusive activities of line hardware suppliers/manufactures participating in the procurement tenders called by DISCOs. Line hardware items are components used in transmission lines for electricity distribution, said a press release issued here.
During the enquiry, procurement data from DISCOs was sought. In addition, inspection of the premises of two undertakings engaged in the supply of Line Hardware material was carried out to gather evidence against the suppliers engaged in collusive activates.
The scrutiny of the impounded record revealed collusive arrangement among the suppliers of line hardware in terms of allocation of tender, division of tender quantity, and tender manipulation through decisions involving aspects such as who will participate as against surrendering tender documents, who would place a higher bid and whether there will be a single winner or multiple winners with tender quantity divided among themselves as per pre-determined shares.
The undertakings appear to be part of an association namely Manufacturers and Contractors Association. This association, prima facie, is used to discuss and make strategy for tenders invited by the DISCOs for procurement of Line Hardware Material.
An idea of the damage caused by a rigged tender can be gauged from a research by International Monetary Fund that shows a 30% efficiency gap in terms of quality vs cost balance in infrastructure development of various projects.
