Poland’s Office of Competition and Consumer Protection (the UOKiK) has issued two decisions confirming collusion in a tender for the modernisation of the rail line between Warsaw Okęcie and Radom. Five undertakings have been fined

The decisions concern a tender of more than half a billion zloty organised in 2011 by PKP Polskie Linie Kolejowe, which operates Poland’s railway network, for the design and construction of an integrated rail traffic control system for the Warsaw Okęcie to Radom rail line. Four contractors took part in the tender, with the only selection criterion being the bid price. The UOKiK proceedings found that the companies involved entered into two separate illegal agreements.  

The first case

Bombardier Transportation, a rail transportation company, was fined approximately PLN 4.2 million, while Zakłady Automatyki Kombud, an industrial conglomerate, was penalised more than PLN 2.2 million, and KZA Przedsiębiorstwo Automatyki i Telekomunikacji, a joint stock company that operates in the rail transport, telecommunications and energy markets, will pay more than PLN 400,000. The undertakings were found to have agreed that Bombardier would submit a courtesy bid that was higher than the bid submitted by the Kombud and KZA consortium. The courtesy bid also contained accounting errors designed to lead to its eventual rejection, which was to be further facilitated by the late extension of the bid validity period and the bid security validity period.

The tender case was also taken up by the state prosecutor in a criminal case. While it has been dismissed, mainly because PKP Polskie Linie Kolejowe incurred no damages, the UOKiK has not ruled out further intervening.  

The second case - Thales Polska and Qumak

In the second case, the UOKiK found that Thales Polska, the Polish subsidiary of the Thales Group, an international conglomerate, submitted a bid as a participant in the tender, and was also slated to be the main subcontractor for its competitor in the tender, Qumak, a sales, services and consulting company. While the UOKiK does not question in principle the possibility of tender participants entering into subcontracting agreements, in this case the cooperation was so thorough as to be tantamount to Thales submitting a double bid. Had Qumak won the tender, almost all of the contract would have been carried out by Thales Polska, while Qumak’s role would have been limited to organisational activities. The UOKiK believed collusion occurred between the undertakings, the objective of which was to distort competition in the tender process by doubling the chances of Thales Polska winning the bid. Thales Polska was fined more than PLN 750,000, while Qumak will pay close to PLN 900,000.

The decisions are not final, and are subject to appeal in the Court of Competition and Consumer Protection.

Changes to provisions

From 18 January 2015, the UOKiK will be better equipped to fight collusion in tenders. The amendment to the Competition and Consumer Protection Act provides for a longer period of limitation in respect of competition-restricting practices from one to five years. This will allow the investigation of a greater number of tenders that raise doubts as regards the protection of competition. It may also further discourage undertakings from entering into collusive agreements.

Additional information for the media:

UOKiK Spokesperson Małgorzata Cieloch
Pl. Powstańców Warszawy 1, 00-950 Warsaw
Phone.: 22 827 28 92, 55 60 314, 55 60 430
E-mail: [SCODE]bWFsZ29yemF0YS5jaWVsb2NoQHVva2lrLmdvdi5wbA==[ECODE]