Brazilian court accepts complaint of cartel in São Paulo Metro construction project.
Fourteen executives have been accused of rigging the bidding process for the expansion of Line 5-Lils. According to prosecutor Marcelo Mendroni, they colluded to determine who would win bids for each section.
247 - Judge Marcos Fleury Silveira de Alvarenga, of the 12th Criminal Court of São Paulo, accepted on Monday (26) the indictment against 14 executives accused of forming a cartel to defraud the bidding for the expansion of Metro Line 5-Lilac. If convicted, the sentences could reach ten years in prison.
The expansion was divided into eight lots, each with different competition. "We concluded that these people, representing their companies, rigged the bidding process to determine who would win each of the sections that make up the expansion," stated prosecutor Marcelo Mendroni in an interview at the Barra Funda Criminal Forum. The suspicions were revealed by a Folha report in 2010, which showed that the winners of the bidding were already known six months before the competition.
According to the prosecutor, as agreed, each company offered a price below the others for a specific section of the project in order to win the bid for that lot. The other construction companies then offered prices above the established limit.
The total cost of the expansion, which runs from the Largo Treze station on Line 5-Lilac to the Santa Cruz (Line 1-Blue) and Chácara Klabin (Line 2-Green) stations, is estimated at R$ 8 billion. Due to the bid-rigging, the loss to public funds was at least R$ 232,8 million, according to the Public Prosecutor's Office indictment.
The following individuals were indicted: Anuaar Benedito Caram, Flavio Augusto Ometto Frias, Jorge Arnaldo Curi Yazbec Júnior, and Eduardo Maghidman, from the Andrade Gutierrez/Camargo Corrêa consortium; Severino Junqueira Reis de Andrade, from Mendes Junior; Adelmo Ernesto Di Gregório, Dante Prati Favero, Mario Pereira, and Ricardo Bellon Júnior, from the Heleno & Fonseca/Tiisa consortium; Roberto Scofield Lauar and Domingos Malzoni, from the Carioca/Cetenco consortium; Carlos Armando Guedes Pascoal, from the Odebrecht/OAS/Queiroz Galvão consortium; and Adhemar Rodrigues Alves and Marcelo Scott Franco de Camargo, from CR Almeida/Cosben.
The indictment accepted by the court does not prevent the continuation of the work, as it falls under criminal law, as happened last year. The project was suspended between November 18th and 22nd. The prosecutor stated that there is evidence of the participation of Metro employees in the fraud, but that it is too weak to be included in the proceedings.