ISLAMABAD, Oct 22: The Competition Commission of Pakistan (CCP) has issued show-cause notices to 10 jute mills for alleged cartelisation in supply of gunny bags to various government departments, including Passco.

The show-cause notices have been issued to 10 members of the Pakistan Jute |Mills Association for violation of Section 4 of the Competition Act, 2010.

In order to detect cases of collusive tendering or bidding in public procurement, the CCP contacted various government agencies, including Passco to provide information on procurements made by them during last three years.

The formal enquiry conducted by the commission was conducted by Shaista Bano (director, Cartel, Monopolies and Trade Abuses) and Nadia Nabi (Joint Director, Cartels, Monopolies and Trade Abuses).

The CCP official said that the inquiry committee is also working to determine the loss suffered by government departments due to collusive behaviour and responsibilities would be fixed after hearing the jute mills and the case has been fixed for hearing on No 6.

The data provided by Passco raised suspicion about bid rigging - a type of collusive behaviour among the jute manufacturing mills prohibited under Section 4 (2) (e) of the Act.

Based on the information available with it and on the recommendation of the Enquiry Committee, the CCP team searched and inspected the PJMA office in Lahore under the powers granted to it by Section 34 of the Act to collect any evidence regarding the suspected violations and alleged cartelisation.

The CCP officials conducted the PJMA office search on July 8 and impounded material and documents which provided information about collusive activities among jute mills.

The inquiry committee noted that there is, prima facie, cartelisation in the market of jute bags in violation of various sections of the law and members of PJMA appear to have deliberately devised a mechanism in an agreement to allocate quota for jute bags tenders invited by different government departments.

The jute mills mutually discussed the price of jute bags after opening the tenders and appear to have a pricing strategy before and after the tenders, thereby, have prima facie fixed the price of jute bags which is a violation of law.