The General Superintendence of the Administrative Council for Economic Defense (SG/Cade) has officially recommended the conviction of 39 companies and 17 individuals following a massive anti-competitive investigation. The case exposes a long-running cartel in the railway engineering sector that systematically manipulated massive infrastructure contracts. The coordinated scheme specifically targeted civil construction, bridge, and viaduct contracts tied to two major infrastructure initiatives: the North-South Railway (FNS) and the West-East Integration Railway (FIOL).
According to the antitrust watchdog, the anti-competitive conduct spanned more than a decade, operating continuously between 2000 and 2014. Over this fourteen-year period, the collusion became increasingly complex as new corporate players joined the arrangement to divide up lucrative project lots. The illicit network relied on price-fixing, rigging contract conditions, market division through pre-arranged consortia, and the intentional suppression of bids. Companies also exchanged highly sensitive competitive data and submitted fake “cover bids” to systematically dismantle the competitive nature of public tenders issued by Valec Engenharia, Construções e Ferrovias SA.
The real-world financial impact of the cartel was immense, directly compromising at least seven major federal bidding processes. In total, the rigged tenders involved R$ 9.7 billion in public funds, which translates to roughly $1.9 billion USD based on current exchange rates.
The extensive investigation has now been handed over to the CADE Tribunal for a definitive ruling, where a reporting counselor will be appointed to review the findings. The legal and financial stakes are high for the accused parties. If the tribunal issues a conviction, the implicated corporations face severe administrative penalties, including fines reaching up to 20% of their total revenue. Furthermore, any individuals found personally responsible for orchestrating or participating in the scheme will face independent penalties, with personal fines scaling up to 20% of the total amount levied against their respective companies.
