Alstom and CAF associates charged with cartel activity

The Public Prosecutor's Office of São Paulo (MPSP) has indicted employees at Alstom and CAF rail companies on charges of collusion in tenders for the purchase and servicing of trains for the São Paulo metropolitan train services company (CPTM).

According to the indictment filed by Prosecutor Marcelo Mendroni, the two companies have colluded since 2009 “to prevent proper competition [for purchasing and servicing trains] either individually or through consortia, by pre-fixing contracts.” The group is believed to have entered agreements and alliances to artificially fix prices for supplying and setting up rail systems.

The following Alstom associates were indicted : Antonio Oporto, Cesar Ponce de León, Isidro Ramon Fondevila Quinonero, Luiz Fernando Ferrari, and Wagner Tadeu Ribeiro, on charges of antitrust felony. Also charged were CAF executives Agenor Marinho Contente Filho and Guzmán Martín Díaz, for antitrust felony and offenses against the government.

According to MPSP, the indictees, acting on behalf of their employers, violated competition laws by using fraudulent coordination to fix successful and losing bids for tenders and directing business.

In one case, Bombardier, Siemens, Tejofran, and Mitsui; CAF, and an Alstom-MGE joint venture were interested in bidding for a contract, but it turned out only CAF submitted an entry.

The indictees would set up a certain bidder with a contract by “having the other competitors in the cartel submitting higher-priced bids or simply not joining,” said MPSP. Among other harmful consequences, this has resulted in overpriced contracts, according to the prosecution.

In a statement, Alstom said it complies with all requests from authorities and affirmed it operates in accordance with the company's code of ethics and all laws and regulations of the countries where it does business. It also declined to comment because it did not have access to the indictment.

Contacted by Agência Brasil, CAF said in a statement “that it has cooperated with the authorities by complying with all information requests, and it operates in strict accordance with Brazilian laws.”

Translated by Mayra Borges