INTRODUCTION

Projects using public-private partnerships (PPPs) have grown in popularity

in India as a result of their ability to improve service delivery and
infrastructure growth. PPP initiatives, which entail cooperation between
the public and private sectors, have increasingly been the driving force
behind the development of India's infrastructure. The goal is to produce
effective and high-quality services by utilising the capabilities of both
parties. However, collusive behaviour and bid rigging diminish the
potential advantages of PPPs and weaken the spirit of fair competition.
Any arrangement that has or is likely to have a significant negative impact
on competition in Indian markets is prohibited by the Competition Act.
Such a contract is invalid. One of the horizontal agreements that will be
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assumed to have a significant detrimental effect on competition under

Section 3 of the Act is bid rigging or collusive bidding.
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In accordance with the Competition Act's explanation to Section 3's sub-

section (3), "bid rigging" is defined as "any agreement, between
enterprises or persons referred to in sub-section (3) engaged in the same
or comparable production or trading of goods or provision of services,
which has the effect of removing or reducing competition for bids or
adversely affecting or manipulating the process for bidding." It is essential
to uphold competition legislation against such actions in order to
safeguard consumer interests, advance effectiveness, and encourage
economic progress. This study intends to show how bid rigging affects the
competitive environment in hypothetical PPP projects and what difficulties
arise when trying to enforce competition legislation against such
behaviour.

RESEARCH QUESTIONS
1. What are the different forms of bid rigging and what are the effects
of bid rigging on the competition landscape in case of PPP projects?
2. What are the challenges faced in enforcing competition law on bid
rigging practices in India?

ANALYSIS
1) Competitors who covertly work together to choose the winning
proposal prior to the tendering process is known as bid rigging. The
parties in a collusion agree to forgo actual competition, so stifling it and
artificially driving up costs. It can appear in many different ways, such as
bid rotation, bid suppression, market segmentation, and cover bidding.
Collusive behaviour can continue into the post-award phases, such as
through bid suppression or compensation agreements.
Some of the most common types of bid rigging are:
Bid Suppression
In order for the identified winning competitor's bid to be accepted, one or
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more competitors who would otherwise be expected to bid or who have

already bid consent to stop from bidding or to withdraw a previously
submitted bid. ”

Complementary Bidding
When “some rivals agree to make offers that are either too high to be
approved or contain unique terms that will not be acceptable to the
buyer”, this practise is known as complementary bidding, sometimes
known as "cover" or "courtesy" bidding. Such bids are just created to
provide the impression of true competitive bidding; they are not meant to
win the buyer's approval. The most prevalent types of bid rigging are
complementary bidding schemes, which mislead buyers by feigning
competition to cover up surreptitiously raised pricing.
Bid Rotation
In bid rotation systems, everyone in the conspiracy places a bid, but they
alternate becoming the lowest bidder. The rotation's conditions may
change; for instance, rivals may rotate contracts based on their size,
assign equal sums to each conspirator, or assign volumes in accordance
with the magnitude of each conspirator. The rule of chance is defied by a
rigorous bid rotation pattern, which raises the possibility of collusion.
Subcontracting
A bid rigging technique frequently includes subcontracting agreements.
Competitors who consent to abstain from bidding or to submit a losing
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offer typically swap subcontracts or supply contracts with the winning

bidder. In certain schemes, the lowest bidder will consent to withdrawing
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its bid in favour of the following lowest bidder in exchange for a lucrative
subcontract that shares the higher price that was gained unlawfully
between them. ”

The impact of bid rigging and collusion in PPP projects can be far-
reaching:
i. Higher Costs: Collusive bids are artificially inflated as a result of
collusive practises, increasing public costs and lowering project
execution value for money.
ii. Lower Quality: The absence of true competition may result in lower-
than-expected services and infrastructure, which might have an
impact on the success of the project as a whole.
iii. Market Distortion: By deterring new entrants, impeding innovation,
and lowering the possibility of competitive advantages, bid rigging
distorts market dynamics.
iv. Lower Investment: The appearance of bid rigging and collusive
practises may discourage prospective investors and bidders,
reducing interest in and involvement in PPP projects.

2) In order to foster healthy competition in the market, the Competition

Act grants the Competition Commission of India a number of different
authorities. In situations of bid rigging, the Commission may look into any
alleged violation of Section 3's subsection (3), which forbids bid rigging, in
the exercise of the authority granted by Section 19 of the Act.
The Director General is instructed by the Commission to conduct an
inquiry and submit a report when the Commission is satisfied that there is
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a prima facie case of bid rigging. The Commission has the authority
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granted to a Civil Court under the Code of Civil Procedure with regard to
things such as calling or demanding presence of any person and
interrogating him under oath, requiring discovery and the production of
documents, and receiving testimony on affidavit. Along with the ability to
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undertake "search and seizure," the Director General is also granted civil
court authority to conduct investigations.
After the inquiry, the Commission may pass inter- alia any or all of the
following orders under section 27 of the Act:
1) instruct the parties to end the agreement and not to enter it again;
2) instruct the company in question to change the contract.
3) require the impacted businesses to adhere by any additional orders the
Commission may issue, as well as the directives, including the payment of
costs, if any; and
4) pass such other orders or issue such directions as the commission may
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deem fit. ”

There are a number of obstacles that prevent the effective enforcement of

competition legislation against bid rigging and collusive practises in PPPs
even after the establishment of such suitable mechanisms against bid
rigging. The challenges can be as follows:
i. Detection Complexity: Collusion and bid rigging sometimes take
place covertly, making them difficult to identify and demonstrate,
particularly in complicated PPP projects..
 ii. Limited Investigative Resources: The CCI may experience
resource limitations that limit its capacity to carry out exhaustive
investigations and successfully punish collusive practises.
iii. Inadequate Reporting and Whistle-Blower Protection: Lack of
reporting and whistle-blower protection systems might
discourage people from disclosing important information on bid
rigging and collusion.
iv. Jurisdictional Complexity: Finding the appropriate jurisdiction for
enforcement in PPP projects is difficult since they frequently
include several governmental and commercial organisations.
v. Low Awareness and Understanding: There may be a lack of
reporting or action because many stakeholders, including
governmental organisations and commercial companies, may not
be fully aware of and comprehend the rules governing
competition.
vi. Evidentiary Challenges: It can be difficult to gather enough proof
of collusion and bid rigging, especially when collaborating parties
take great effort to hide their behaviour.
vii. Timing and Speed: While prompt action is essential to avoid
irreparable harm, enforcement procedures can take time,
enabling conspiring parties to carry out their plans before legal
intervention.
viii. Political Influence: It is difficult for enforcement bodies to
function independently and take decisive action against bid
rigging in PPP projects since they frequently include substantial
political and administrative influence.

CONCLUSION
The Indian government, enforcement agencies, and corporate parties
must make extensive efforts to overcome the obstacles to effectively
implementing competition legislation against bid rigging and collusive
practises in PPP projects. India can guarantee the effective execution of
PPP projects, contributing to the country's economic growth and better
infrastructure, by resolving these issues and encouraging a competitive
environment. It is impossible to overestimate the value of fair
competition, and eliminating collusion and bid rigging is essential to
attaining this objective. For India's public-private partnership projects to
promote openness, accountability, and fair play, strong enforcement,
cooperative efforts, and proactive measures are essential.