Brazil- 19.6 million fine imposed for Public Works cartel

Brazilian competition watchdog CADE has condemned Saenge SA and Onix Construcões SA (CONCIC) for cartel formation and collusion during the bidding processes carried out by Sao Paulo State’s Public Sanitation utility company, SABESP. The investigation will also look into the actions of five company executives charged with participating in these anticompetitive activities, specifically during the realization of construction work in the Santos Metropolitan Region.

The companies are accused of signing an agreement in which the companies would jointly build part of the Mambu/Branco water distribution system, a government contract for which both companies were already competing separately, with CONCIC in the lead. Through the agreement CONCIC would have intentionally missed deadlines for handing over documents, allowing second-place Saenge SA to win the contract with a bid 23.1% higher than CONCIC’s.

CADE’s tribunal has considered this proposal suppression as harmful to competition, due to the increase in prices which resulted from CONCIC’s abandoning of the running. The companies will now face fines totalling 18.6 million Reales, with close to a million more directed towards the five company executives mentioned previously.

Full content: CADE

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