São Paulo's Public Prosecutor's Office indicts 11 executives for train cartel.

One defendant is from the Companhia Paulista de Trens Metropolitanos (CPTM), and the others are from companies in the railway sector, such as Alstom and CAF Brasil, who divided three administrative contracts among themselves, colluding on the bids to be submitted in the tenders; the frauds occurred in 2007 and 2008, during the government of José Serra (PSDB) in São Paulo; "The companies divided the market and the final price was inflated, directing each tender and knowing in advance which company would be the winner of each contract and what the prices of each would be, which caused the other companies that participated in the cartel to offer their bids at higher prices or simply not participate in the competition in the aforementioned tender, failing to submit a proposal," says the indictment.

April 17, 2015, 20:14 hUpdated May 27, 2019, 10:24 AM

One defendant is from the Companhia Paulista de Trens Metropolitanos (CPTM), and the others are from companies in the railway sector, such as Alstom and CAF Brasil, which divided three administrative contracts among themselves, colluding on the bids to be submitted in the tenders; the frauds occurred in 2007 and 2008, during the government of José Serra (PSDB) in São Paulo; "The companies divided the market and the final price was inflated, directing each tender and knowing in advance which company would be the winner of each contract and what the prices of each would be, which caused the other companies that participated in the cartel to offer their bids at higher prices or simply not participate in the competition in the aforementioned tender, failing to submit a proposal," says the complaint (Photo: Gisele Federicce).

Flávia Albuquerque - Reporter for Agência Brasil

The Public Prosecutor's Office of the State of São Paulo (MP-SP) has filed charges against 11 executives from railway companies and one employee of the Companhia Paulista de Trens Metropolitanos (CPTM) for forming a cartel in contracts signed for the supply of trains and railway materials for the execution of three CPTM projects, signed in 2007 and 2008. According to the indictment, the companies divided three administrative contracts among themselves, colluding on the bids to be submitted in the tenders.

"The companies divided the market and inflated the final price, directing each bidding process and knowing in advance which company would win each contract and what the prices would be for each one. This caused the other companies participating in the cartel to offer their proposals at higher prices or simply not participate in the bidding process, failing to submit a proposal," the complaint states.

The accusation is the result of a criminal investigation based on documents forwarded by the Administrative Council for Economic Defense (Cade) and the analysis of bidding processes, which demonstrate anti-competitive practices in the procedures initiated by CPTM.

David Lopes and Wilson Daré, executives of Temoinsa do Brasil Ltda.; César Ponce de Leon, Luiz Fernando Ferrari, and Ruy Grieco, executives of Alstom Transport S/A; José Manuel Uribe Regueiro, of CAF Brasil – Construcciones y Auxiliar de Ferrocarriles S/A; Carlos Levy, executive of Bombardier Transportation Brasil Ltda/ DaimlerChryler Rail Systems (Brasil) Ltda.; Mauricio Memoria; Manuel Carlos do Rio Filho and Telmo Giolito Porto, of Tejofran – Empresa Tejofran de Saneamento e Serviços Ltda; Massimo Giavina-Bianchi, of T'Trans – Trans Sistemas de Transportes S/A; and Reynaldo Rangel Dinamarco, who was president of the CPTM Bidding Committee, were indicted.

All companies and CPTM were contacted, but only Tejofran responded by the time of publication. In a statement, Tejofran reported that it had not been notified of the complaint, but reiterated that it participated in consortia as permitted by law. "The company strictly adhered to the terms of the tender and performed all services stipulated in the contract, at competitive prices. It further clarifies that this is the same matter being processed by CADE (Administrative Council for Economic Defense), for which the company has already submitted a defense, which has not yet been judged. And, in accordance with its commitment to the strictest ethical standards, it is available to the authorities for any necessary clarifications."