UNDER SECTION 26(2) OF THE COMPETITION ACT, 2002

The present information has been filed under section 19 of the Competition Act, by CSR NANJING PUZHEN CO. LTD, a Company incorporated in China (hereinafter referred as informant) against the Kolkata Metro Rail Corporation Ltd. (KMRCL) and Ministry of Urban Development (MOUD), Govt. of India. The informant alleged bid rigging and abuse of dominant position by the opposite parties in floating the tenders for Metro Train Cars.

2. The brief facts of the case are as follows:

2.1 It is alleged by the informant that KMRCL had issued a pre-qualification tender notification on 20.01.2009 for the design, manufacturing, supply, testing and commissioning of Electric Multiple Units and training of personnel for its project. Total requirement was 16 train sets of 4 cars configuration i.e. 64 coaches to start with.

2.2 The initial eligibility criteria for the prospective bidders was an experience of manufacturing, integrating, assembling and supplying a minimum of 200 cars in the preceding 10 years ending 31.03.2009, whereas in the check list for applicants in pre-qualification, an additional criterion was inserted that at least 50% of the cars should have been supplied and proven to be in service for a period of five years or more in a country other than the country of manufacturer.

2.3 It is alleged that the informant and many others would have qualified for the bid, being most competitive in prices and highly experienced in delivering state of art products, but they could not bid because of this additional condition. The KMRCL issued corrigendum for this amendment in the eligibility criteria and simultaneously issued revised pre-qualification documents dated 25.03.2009.

2.4 It has been mentioned in the information that only 4 bidders had qualified for the bids of said tender because of such stringent conditions. Out of those 4, only 1 qualified for the purpose of opening of financial bid, which was found to be very highly priced and therefore the KMRCL decided to scrap the tender altogether.

2.5 KMRCL invited a fresh tender on 02.09.2009 and further made the pre-qualification condition more stringent. The participation in the tender was sought from those firms only who had the experience of designing, manufacturing, supplying, testing, commissioning and integration of minimum of 200 stainless steel cars with similar features including Traction, Propulsion System etc in the preceding 10 years ending 31.07.2010. Further, at least 50% of the said 200 cars should have been supplied and proven to be in service for a period of 5 years or more (ending 31.12.2009) in India or in a country other than the country of manufacturer.

2.6 It is alleged by the informant that the additional conditions of manufacturing 200 stainless steel cars in preceding 10 years restricted the competition as the cars are normally manufactured out of aluminum, carbon steel and stainless steel. Further, the condition that at-least 100 cars should have been supplied in India OR in a country other than the country of manufacture, would go to benefit the Indian manufacturer only, as for an Indian manufacturer both the conditions i.e. supply in India as well as supply abroad would qualify the manufacturer. In contrast, a foreign manufacturer who had not supplied to India or to some other foreign country would be disqualified. The words "in India" were added to accommodate some specific enterprise which shows that an element of discrimination was introduced despite the fact that it is an international tender.

2.7 It is also alleged by the informant that such stringent conditions mentioned in the above paragraphs are discriminatory and prohibited under the provisions of the Competition Act, 2002. Further, by way of such tender the KMRCL is guilty of abusing its dominant position in the market as well as rigging the bid to the detriment of a large number of foreign competitors who could not bid due to such unwarranted and abusive stri