PANEVĖŽYS CITY MUNICIPALITY CONCLUDED ILLEGAL CONTRAT WITH MUNICIPAL COMPANY

On 16 July, the Competition Council found that Panevėžys City Municipality (further the Municipality) restricted competition within waste management sector. The Municipality authorised a municipal company Panevėžio specialus autotransportas to provide waste management services in Panevėžys without a competitive procedure and, thus, breached Article 4 of the Law on Competition.

The Municipality failed to convince the Council that Panevėžio specialus autotransportas was the only company able to ensure continuity, quality and accessibility of waste management services. Neither the Municipality nor the municipal company could provide any evidence-based exceptional and objective circumstances to justify competition-restricting municipal decision.

“Municipalities often use references to “consumer protection” and “investments” made into municipal companies to justify their competition-restricting decisions. Unfortunately, more often than not these justifications are nothing more than just a poorly disguised fear to let competition into the markets so far dominated by municipal companies. So called “investments” in many cases are nothing more than privileges and subsidies that safeguard municipal companies against bankruptcy, simultaneously “safeguarding” consumers against competition benefits,” – says Šarūnas Keserauskas, the Chairman of the Competition Council.

The Council obligated the Municipality to repeal the agreement signed with Panevėžio specialus autotransportas within 3 months after the Council’s decision is published on the authority’s website.