The Competition Council applies a fine of more than 100,000 euros for house warming projects in Saldu

On April 26, the Competition Council (KP) imposed a penalty of EUR 108,472.36 on the construction company SIA “Gate L” and SIA “Aksīte” for implementing a prohibited agreement, dividing among themselves the insulation objects of multi-apartment residential houses in Saldu, LETA agency was informed by the KP.

The two companies entered into a settlement with the KP, as a result of which the companies confirmed their guilt of the infringement and undertook not to appeal the decision of the KP, for which they received a 10% reduction in the fine.

Among them, “Gate L” was fined in the amount of 53,506.52 euros and “Aksite” – in the amount of 54,965.84 euros.

The KP received initial information about the possible violation of competition law from the Central Finance and Contracts Agency.

Taking into account the evidence obtained during the investigation of the case, the KP established that “Gate L” and “Aksite” agreed on the conditions of participation in procurement, reaching a mutual agreement in 2017 on the distribution of three Nākotnes ielas house insulation projects, as well as reaching an agreement in 2021-2022. in 2010 for the distribution of two house warming projects on Veidenbaum Street.

KP found that the two companies mutually divided the insulation of two houses on Veidenbaum Street, including exchanging commercially sensitive information. At the same time, the KP established that in the procurement of the insulation of houses on Nākotnes Street, the two businessmen formed an association, but did not perform the works in an equal amount in each object as stipulated in the contract, but each performed the works in a different object.

“Gate L” performed the works at the facility on Nākotnes iela 7, while “Aksīte” performed all the works on Nākotnes iela 1A and Nākotnes iela 1B. Thus, the association was created to reduce competition in specific procurements and to exchange commercially sensitive information under the guise of the association.

KP Chairman Juris Gaiķis points out that the insulation of multi-apartment residential buildings using European Union co-financing is a popular solution not only for increasing the energy efficiency of houses, but also for improving the quality of life of residents.

“However, when organizing such projects, especially if they are organized by the residents themselves, uniting in an association, it is necessary to remember correctly organized procurements and the attraction of fair applicants who have competed with each other with the best offer at the best price,” emphasizes Gaiķis.

He expresses that in such situations, when the parties involved are ready to admit that mistakes have been made during the project, a successful solution is the conclusion of the Administrative Agreement or settlement, with the companies ending the legal dispute with the KP and receiving a reduction in the fine, as happened in this case.

Information on “Firmas.lv” shows that “Gate L” was registered in 2006 and the company’s share capital is 2845 euros. The company is fully owned by Jānis Lej. In 2022, the company worked with a turnover of 2.814 million euros, which is 35.1% more than in 2022, but the company’s profit increased six times and was 122,846 euros. The financial indicators for 2023 have not yet been made public.

On the other hand, “Aksite” was registered in 2007 and the company’s share capital is 2844 euros. The company belongs to Vairis Štencelis. In 2023, the company worked with a turnover of 2.443 million euros, which is 13% less than in 2022, while the company’s losses were 131,331 euros, as opposed to the profit a year earlier.