Brazil watchdog likely to rule next month on rail contract collusion

Brazil's antitrust regulator Cade is reportedly set to rule in June on allegations of collusion in rail contracts.

The most likely outcome is that the watchdog will condemn the companies involved, according to newspaper O Estado de S. Paulo, which did not reveal its source.

At the end of last year, Cade's general superintendency recommended sentencing 16 companies and issuing substantial fines due to alleged wrongdoings in subway and train tenders.

Cade found evidence of widespread collusion between 1998 and 2013. The companies reportedly rigged at least 27 bidding processes for 11 subway projects, eight of them in São Paulo state. The contracts were for the construction, extension and refurbishment of lines, and purchase and maintenance of trains, among other things.

Further wrongdoing was detected in subway contracts in Minas Gerais and Rio Grande do Sul states, and in capital Brasília.

Cade estimates the fraudulent contracts totaled 9.4bn reais (US$2.34bn).

According to the regulator, the companies involved were Alstom, Bombardier, CAF Brasil, Hyundai-Rotem, Mitsui, Tejofran, Iesa, MGE, MPE, Procint, Serveng-Civilsan, TC/BR, Temoinsa, Trans Sistemas, ConsTech and Balfour.

The superintendency's recommendation forms the basis for the final ruling of the regulator's council, which is composed of seven counselors who will also determine the size of the penalties.

The companies could have to pay fines of up to 20% of their 2012 revenues, the year before the case was presented.