Competition Commission of India dismisses Complaint against 37 Railway Signalling Cable Suppliers

NEW DELHI: Competition Commission has rejected allegations of unfair business practices made against 37 railway signalling cable suppliers even as it suggested that procurement policy of the Indian Railways should be re-assessed to ensure accountability of entities participating in the tendering process.

In a 49-page order, the watchdog said “no case of contravention” of competition norms has been found and disposed of the matter.

There was no violation of Section 3 of the Competition Act that pertains to anti-competitive agreements.

The ruling came on a complaint filed by a North Western Railway official alleging that the 37 entities had formed a cartel for supply of railway signalling cables and that they quoted high rates.

Investigations by the Director General (DG) – the probe arm of the regulator – found that 11 entities had violated competition norms but did not find any contravention by the remaining 26 entities.

“In the present case, neither there is any evidence of anti-competitive agreement or arrangement amongst five sub-sets of bidders nor any circumstantial evidence to establish tacit collusion.

“Even though the DG found certain instances of identical/ similar pricing, the investigation does not bring out that the same was an outcome of collusion,” the Competition Commission of India (CCI) said in its order dated July 12.

According to the regulator, owing to structural links and family relationships, among other factors, the five subsets of bidders had the opportunity to exchange information and coordinate their behaviour.

However, the CCI said, “in absence of sufficient and cogent evidence to show collusion”, it cannot be conclusively established that they have acted in contravention of the provisions of Section 3.

During the probe, the DG had classified the 11 entities into five subsets on the basis of various factors, including structural links and family relationships.

Paramount Wires and Cables and Paramount Communications; Tirupati Plastomatics and Kanhha Cables; Vindhya Telelinks and Birla Cable; Incom Cables and Incom Wires and Cables; and Myco Electricals, Continental Telepower Industries and Delhi Telecom. The 11 entities were classified into these subsets.

Further, the CCI said the scale of operations of Indian Railways requires an efficient and economical procurement policy which is in tandem with competition laws and promotes competition through open tenders as one of the cardinal objectives.

“The rules governing procurement policy of products by railways should be reassessed to ensure efficiency, transparency and accountability of participants in tenders,” the CCI said.