Illegal purchase of biogas by Östgötatrafiken

Published

The agreement between Östgötatrafiken and Svensk Biogas i Linköping AB on the supply of biogas fuel is a goods contract that should have been subject a procurement procedure. Since no procurement procedure took place, the purchase is illegal, under decision by the Swedish Competition Authority.

Östgötatrafiken, which is the body responsible for public transport in Östergötland, a region of Sweden, has concluded an agreement with the municipally owned company Svensk Biogas i Linköping AB on the supply of biogas fuel to the province’s public transport system. The contract runs for 15 years and is described by the parties themselves as a major transaction worth a total of approximately SEK 1.5 billion (150 million euros).

The Swedish Competition Authority considers that legally speaking under the procurement law the agreement represents a contract for pecuniary interest and that Östgötatrafiken has failed to show that Svensk Biogas is the only supplier capable of delivering biogas fuel to the Östergötland transport system over the next 15 years. Since no procurement procedure took place before the agreement was concluded, Östgötatrafiken has breached the Swedish and EU legislation concerning procurement of entities operating in the water, energy, transport and postal services.

In announcing its decision, the Swedish Competition Authority stated that other suppliers could suffer detriment as a result of Östgötatrafiken illegally excluding them from the possibility of competing for the contract. Also, it cannot be ruled out that Östgötatrafiken might have struck a better deal had it engaged in a procurement procedure.

In the view of the Competition Authority, Östgötatrafiken’s breach of the law is exceptionally serious and contravenes both EU and Swedish procurement legislation.

For further information, please contact:
Daniel Johansson, Rapporteur, tel +46 (0)8-700 15 74

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