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Metrogate | E-Mails Claim Serra Involvement

Serra as straphanger

Serra as straphanger

New details about and new cases of cartel formation in the São Paulo rail and subway sector, but no revelations about senior officials responsible for the scheme:

The document we have examined do not contain evidence of wrongdoing by Serra

The former governor and his secretary of transporation is, however, said to have met a Siemens executive.

Source: Folha de S.Paulo

In 2008, ex-governor of  S. Paulo José Serra (PSDB) suggested to the multinational Siemens engineer an accord in order to avoid having a business dispute  impede an auction by the CPTM commuter rail company. This according to an e-mail sent by a Siemens exec to his superiors at the time.

The e-mail narrates a conversation the exec said he held with mayor Serra and his Secretary of Metro Transportation and Siemens director José Luiz Portella, during a railway conference in Amsterdam.

[jump hed] Other side: Serra denies meeting with ex-executive.

At the time Siemens was disputing with CAF a large order involving the acquistion of 40 new trains for the  CPTM, and threatened to take the case to court unless it emerged victorious.

Siemens presented the second best proposal, but expected to obtain the contract if it could disqualify its Spanish rival, which presented the lowest price.

According to the e-mail by the Siemens exec, Serra warned that the auction would be cancelled if CAF were to be disqualified, but added that he and Portella “might consider other solutions, to avoid aving the business dispute case a delay in delivery.

According to the e-mail, one solution discussed was having CAF divide the order, giving it 30% of the contract, that is, 12 of the 40 trains contracted for. Another possibility was to order train components from Siemens.

Serra told the Folha that he had not met with companies interested in the CPTM contract and said the auction was “clean,” with the victory going to the lowest bidder.

Former secretary Portella said the accusation of irregularities om the project were “absurd” and there was no irregularity.

Library of Bribel

The e-mail inspected by the  Folha is part of a vast collection of some 10,000 handed over to antritrust authority CADE s part of an investigation into cartels in subways and metro trains  1998-2008.

The document we have examined do not contain evidence of wrongdoing by Serra, but suggests that the state government followed all dealings between Siemens and its competition  very closely. 

In another message from Marchetti, in September 2007, the executive said that the São Paulo government “would like to see Siemens in the running for at least 1/3 of the CPTM package” in “partnership with other companies.

The documents were handed over to CADE by Siemens itself, which worked out a deal with Brazilian officials in which it would collaborate with investigations and thereby avoid the statutory punishment for the crimes it has confessed.

Contacted by the  Folha,  CADE said the case is under seal and no information may be passed to the press.

In the train acquisition auctoin, talks between Siemens and CAF had no result.  Siemens filed administrative appeals and took its rival to court, but its pleas were rejected.

CAF prevailed and signed the CPTM contract in 2009. CAF carried out the contract on its own, without subcontracting Siemens or other companies.

Alstom also took part in this competitive bidding processs. According to documents handed over by Siemens, the company had a deal with its French rival  to split the contract if one of them prevailed.

The documents obtained by Brazilian authorities also show that later on, at the same time as the Siemens was negotiating with CAF, Siemens discussed the possibility of an alliance with Hyundai against the Spaniards of CAF.