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Bombardier says documents seized in Brazil rail cartel probe

The Bombardier Innovia Monorail 300 system designed for the Brazillian city of SÊo Paulo, is shown in this artist's rendering made available on Monday Sept. 27, 2010. Bombardier Transportation won a contract with two partners to design, supply and install a 24-kilometre monorail system in Sao Paulo, Brazil. THE CANADIAN PRESS/Bombardier

THE CANADIAN PRESS

Bombardier Inc. has confirmed it is one of several rail manufacturing companies being investigated over allegations of bid-rigging on railway contracts in Brazil.

A spokesman for the Montreal-based aerospace company's transportation division said on Tuesday that Brazil's competition agency – the Administrative Council for Economic Protection – seized documents from Bombardier on July 4 as part of a larger probe into an alleged cartel related to bidding for the purchase of railway equipment and the construction and maintenance of railway lines.

"Bombardier is absolutely not involved in a cartel in Brazil. What we know is that there is a general investigation going on right now in the rail industry," said Bombardier Transportation spokesman Marc Laforge.

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"We fully co-operated and intend to continue co-operating," he said.

A spokeswoman for rival Alstom SA of France also confirmed that it is cooperating with authorities in the investigation.

"We were visited last week by the CADE – the Administrative Council for Economic Protection. We have been co-operating with the authorities," said Céline Huguet in an interview Tuesday.

A report in the Brazilian newspaper Folha de S. Paulo says Germany's Siemens AG had alerted Brazilian antitrust watchdogs to the existence of a cartel in which it participated.

"Siemens is aware of the investigation conducted by the Administrative Council for Economic Defense (CADE), related to a cartel accusation in biddings for the acquisition of trains and construction of subway lines in Brazil," a Siemens spokesperson said in an e-mail Tuesday.

"Since 2007, Siemens has made major efforts to develop a new and effective compliance system, which focuses, in particular, on sensitizing employees with regard to antitrust issues. Siemens' code of conduct also emphasizes the importance of fair competition and obligates all employees to comply with antitrust regulations.

"Simens fully cooperates with the authorities."

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The Folha newspaper report says the alleged cartel also includes Spain's CAF and Japan's Mitsui.

Mr. Laforge said there are 13 rail equipment companies in all being probed.

Several companies are vying for contracts on a project to build a high-speed train line between Rio de Janeiro and Sao Paulo.

Mr. Laforge said Bombardier Transportation unit is studying the possibility of bidding on the high-speed rail project.

Bombardier Transportation is currently at work on a $1.4-billion (U.S.) monorail project in Sao Paulo.

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About the Author
Quebec Business Correspondent

Bertrand has been covering Quebec business and finance since 2000. Before joining The Globe and Mail in 2000, he was the Toronto-based national business correspondent for Southam News. He has a B.A. from McGill University and a Bachelor of Applied Arts from Ryerson. More

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