Competition Commission of India to probe Price-fixing in RCF tender

Mumbai:  Anti-monopoly watchdog Competition Commission of India (CCI) is looking into an alleged formation of a cartel between two railway brake manufacturers Knorr Bremse and Faiveley Transport when they quoted identical prices for the tenders floated for rail brakes by the Railway Coach Factory at Kapurthala in Punjab.

According to a complaint filed by RCF, Kapurthala, the Indian subsidiaries of German braking system maker Knorr Bremse and French railway equipment maker Faiveley Transport have formed a cartel to supply ‘Axle Mounted Disk-Break System’ for coaches at Railway Coach Factory.

The railway department had floated tenders to provide specific braking system for Linke Holfmann Busch or LHB coaches, that were designed by the German manufacturer for air-conditioned (AC) and Non-AC coaches and power cars.

The coaches are in use since year 2000 in India in the Rajdhani and the Shatabdi Express.

The complaint filed by Kapurthala Railway coach factory states the order is normally split between both suppliers to ensure uninterrupted supply of material. The practice of sharing quantities for critical parts is a normal practice as per guidelines laid down by Railway Board. In a complaint to CCI, the railways claimed that the two bids were totally identical on three occasions in 2011 when the department had floated emergency tenders.

After noticing the identical rates and set pattern, the tender committee asked both the companies for a breakup of items used.