Brazil’s competition watchdog CADE, together with the Federal Police and the Office of the Comptroller General (CGU), has launched a major operation targeting an alleged cartel suspected of rigging bids for emergency highway reconstruction projects in Rio Grande do Sul.
The investigation focuses on contracts awarded by the National Department of Transport Infrastructure (DNIT) for urgent repair and engineering work following the devastating floods that hit the southern state in April and May 2024.
According to authorities, the probe began after the Federal Police’s anti-corruption unit identified suspiciously coordinated actions among three engineering firms based in Rio Grande do Sul. Investigators believe the companies colluded to manipulate tender results and divide among themselves three public contracts worth more than R$72 million (around €13 million).
These contracts were financed with federal emergency funds set aside for rebuilding infrastructure damaged by the floods.
Search and seizure warrants were executed on Wednesday in Porto Alegre’s metropolitan region and in Brasília, involving 51 federal police officers, 15 CADE officials, and four CGU experts.
Authorities say the materials collected will help determine the extent of the alleged coordination. If proven, the scheme would constitute a serious breach of Brazil’s competition law.
Following the investigation, CADE’s General Superintendence will prepare a technical report and refer the case to CADE’s Tribunal for a final ruling. Companies found guilty of collusion face fines of up to 20% of their annual revenue, while individuals could be fined between R$50,000 and R$2 billion (€9,000–€360 million).
Officials said the operation highlights the government’s determination to protect public funds and ensure fair competition, especially in reconstruction projects following natural disasters.
