Competition watchdog alleges cartel in Rīgas Satiksme "nanowater case"

The Latvian Competition Council has discovered that the Rīgas Satiksme municipal public transport company has possibly participated in formation of a cartel in the so-called nanowater case, Competition Council’s representative Paula Vilsone said March 20.

The Competition Council has informed Rīgas Satiksme and several market players on the evidence that suggests of alleged illegal agreement in two price surveys of supplying nanotehcnological chemicals to the company.

The price surveys were organized in 2012 and 2014 for a total sum of more than €800,000.

According to the information in the disposal of the competition watchdog, the bidders coordinated the terms and agreed on the planned winner, suggesting of an illegal agreement. Also, Rīgas Satiksme is believed to have participated in this agreement and had been informed about the process.

Competition Council’s representative Māris Spička said that cases when the organizer of a tender is engaged in formation of a cartel are especially negative because the organizers should take care of fair tenders and economic use of public funds.

If the facts discovered by the Competition Council prove to be true, the participants of the cartel might be fined and will have to pay up to 10% of their net turnovers of the previous financial year.

The Competition Council reminds that the letter of facts does not yet prove that the offense has been committed and does not show the final results of the probe.

The so-called nanowater affair deals with a rigged procurement tender organized by several Rīgas Satiksme officials in 2012, which awarded a contract for the supply of "nanotechnological chemicals" to Rīgas Satiksme by a company established specifically for carrying out the scheme. Instead of chemicals, the company was delivering water to Rīgas Satiksme, but no one bothered to look into the matter until early 2015, when TV3 investigative program Nekā Personīga (Nothing Personal) first reported about what later became known as the nanowater affair.

The "nanowater affairs" will be heard by the Riga Vidzeme District Court on May 27, 2019. Four persons have been charged in this case – former Rigas Satiksme employee Vjačeslavs Stunžāns, "nanotechnological chemicals" supplier Aleksandrs Bezkorovainijs, auditor Valērijs Baškirovs and Vita Baurovska. Three persons have been charged with large-scale fraud and money laundering, and one person in addition has been charged with abuse of authority. The fourth persons is charged with fraud and money laundering.

Even though Rīgas Satiksme has been recognized a victim in the case, it has not claimed any compensation. The estimated loss to Rīgas Satiksme is €482,060 in one transaction and €352,182 in the other transaction.

Late last year, police searched the offices of Rīgas satiksme in connection with the case, which is separate from the large-scale graft accusations against company reps and city council officials over rigged transport tenders. 

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