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Siemens Says São Paulo Government Endorsed Subway Cartel

08/02/2013 - 08h36

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CATIA SEABRA
FLÁVIO FERREIRA
FROM SÃO PAULO

The German multinational Siemens presented to the Brazilian authorities documents that said São Paulo government knew and approved the creation of a cartel in bids for works in the State's subway.

A negotiation with State representatives, according to Siemens, is recorded in "diaries" presented by the company to Brazil's antitrust regulator, CADE (Administrative Council for Economic Defense).

Last month, the engineering giant denounced to the antitrust regulator, the existence of a cartel - in which it took part - for purchase of railway equipment and construction and maintenance of railway lines and subway in São Paulo and the Federal District.

In exchange, the company signed a leniency agreement that could guarantee its immunity if the cartel claim is confirmed and punished.

Luiz Carlos Murauskas/Folhapress
According to CADE, the collusion extended to Geraldo Alckmin government (2001-2006), and the first year of José Serra's government in 2007.
According to CADE, the collusion extended to Geraldo Alckmin government (2001-2006), and the first year of José Serra's government in 2007.

Cartel formation for São Paulo subway line 5, according to Siemens, occurred in 2000, when Mário Covas, who died the following year, was governor. According to CADE, the collusion extended to Geraldo Alckmin government (2001-2006), and the first year of José Serra's government in 2007.

The transportation secretary in Covas administration, between 1995 and 2001, Cláudio de Senna Frederico said he had no knowledge of the cartel formation, but he did not rule that out. "I do not remember a competitive bid, in fact, happening," he said.

Alckmin's government says the documents reveal communication between the companies and, if the cartel is confirmed, the government will ask for punishment of those involved. Serra did not comment.

A document delivered by Siemens describes the alleged role of the government in favor of a settlement between companies sharing the subway line 5 route (Largo Treze-Capão Redondo) already in operation.

In a document, dated February 2000, Siemens executives describe a series of meetings for the creation of the cartel. In one of them, it is reported that "the supply for train cars is organized in a 'political' consortium. So, the price was very high," says an excerpt.

"An agreed consortium, then, is very good for all the participants," says a Siemens executive.

Siemens says that an agreement allowed a 30% price increase in another bid, for CPTM (São Paulo Metropolitan Train Company) trains maintenance.

Translated by SIMONE PALMA

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