CCI Rejects Bid-Rigging Allegations In BESCOM Smart Meter Tender, Closes Case

The Competition Commission of India (CCI) has dismissed allegations of bid-rigging and collusive conduct against Bangalore Electricity Supply Company (BESCOM) and two contractors in a smart meter procurement tender, finding no prima facie contravention of the Competition Act.

A coram of Chairperson Ravneet Kaur and Members Anil Agrawal, Sweta Kakkad and Deepak Anurag passed the order.

The information was filed by Mahesh N. R., a consumer of BESCOM, alleging that BESCOM, along with Rajashree Electricals Davangere and VR Patil Vividh Vidyuth Nirman Pvt. Ltd., manipulated tender conditions to their favour.

After examining the material on record and additional information submitted by the informant, the Commission held that no prima facie case of cartelisation or anti-competitive agreement was made out and ordered closure of the matter under Section 26(2) of the Competition Act, 2002.

The informant alleged that BESCOM floated a tender for the procurement of four lakh smart meters per year for five years along with the selection of an Advanced Metering Infrastructure (AMI) service provider for ten years, and that the tender conditions were deliberately structured to favour Rajashree Electricals (OP-2) and VR Patil Vividh Vidyuth Nirman (OP-3), who were alleged to be acting in concert.

He contended that the eligibility conditions were tailor-made to exclude other competitors, foreclose market access, and inflate costs, and that consumers would be burdened with AMI service charges of Rs 75 per meter per month, resulting in overpayment running into thousands of crores.

The Commission was not persuaded. It observed that neither the KTPP Act nor the rules framed under it make the use of standard tender documents mandatory and that procuring entities are permitted to modify technical conditions where required. On this basis, the tender terms were found to be within the bounds of the procurement framework.

Addressing the allegation regarding suppression of contract value, the Commission noted that the claim was directed only against BESCOM. No material had been produced to show any agreement or coordination with the private bidders, and the record did not support the charge of cartelisation.

The Commission also compared the pricing with smart meter tenders issued in other states. The data showed significant differences in both the quantities involved and the life-cycle period adopted for the meters. Karnataka had used a 120-month life cycle, longer than in several other tenders, and when this factor was considered, the rates could not be said to be abnormally high or inflated.

Referring to its earlier decisions, the CCI reiterated that a procuring authority has the discretion to frame tender conditions so long as they remain within the legal framework. In the absence of material showing collusion or bid rigging, the Commission held that no prima facie case was made out and ordered closure of the proceedings under Section 26(2) of the Act, while also declining the request for interim relief.