Peru: Lack of competition in Lima’s new transport contracts – Indecopi

Peru’s National Institute for the Defence of Competition and Copyright Protection (INDECOPI) has released a report on a series of public contracts awarded through contest for the building and operation of Lima’s new roadways. In this report, the agency finds a lack of effective competition during the contest, particularly in the way contracts were awarded for the operation of public transport in several important corridors.

The agency identified three main obstacles to competition, which tended to favor incumbent companies while blocking access to newcomers. First, the contest gave higher marks to companies who already owned a set number of units, without considering ability of newcomers to purchase additional units. Second, higher marks were awarded to operators who already covered a portion of the planned route (called ‘superposition’). Finally, the agency finds fault with Protransporte’s decision to share with all competitors certain sensitive information, such as the number of vehicles owned by each participant and the maximum number of slots each could be awarded.

INDECOPI has issued recommendations to Peru’s transport authority to address these concerns by increasing the number of possible suitors in future contests, as well as other recommendations for improving the quality of competition.

Source: Gestión

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