The Competition Commission of Pakistan (CCP) yesterday issued show cause notices to five companies for, prima facie, collusive bidding in Peshawar Electric Supply Company’s tender number ADB-PESCO-06-2009 (PESCO Tender) for the supply of High Tension (HT) and Low Tension (LT) Pre-stressed Concrete (PC) Poles. The companies have been given fourteen (14) days to show cause in writing and to avail the opportunity of being heard before CCP on 25-08-10. Earlier, CCP initiated an enquiry into possible collusive bidding in PESCO’s tender after reviewing details of public procurement carried out by PESCO in the past few years. The review was part of the CCP’s Bid Rigging Detection Program aimed at identifying and curtailing collusive bidding in public procurement. The enquiry was concluded vide Enquiry Report dated 22-07-10. The Enquiry Report found that, prima facie, five companies involved in the supply of HT PC and LT PC poles had colluded to rig the tender and derive artificially high profits by signing a joint venture agreement and arranging for a cover bid, as well. The Enquiry Report observed that the joint venture agreement appeared to be a cover to divide and share the supply of HT PC and LT PC poles for PESCO Tender. Collusive bidding poses serious concerns for public procurement. Due to the collusion between bidders, the cost of public procurement artificially increases and the taxpayer have to bear the unreasonable cost. CCP has just recently issued an order in a case involving collusive bidding by four companies to share and divide the market for dredging at Pakistani ports. The four companies involved in dredging at ports were found in violation of the Competition Ordinance 2010 and were fined 50 million each.
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