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The delay in the organization of tenders leads to an increase in the price of the acquisition of salt necessary for desalination, according to the Conseil de la concurrence, following a sectoral inquiry into the market for salt making snow.
The Competition Authority considers that the organization by the National Road Administration – CNAIR auctions for the purchase of salt clearing snow earlier in the year and the l 39; effective use of its own storage capacity (about 150 000 tonnes) would allow several bidders to participate, possibly external, which would lead to increased competition and, implicitly, a lower purchase price.
After analysis, the Competition Council found that the annual purchases of salt clearing imply the supply of large quantities in a very short time, which poses difficulties to ensure the production and especially the organization of the logistic services necessary for the transport and on delivery. In these circumstances, the only responses to the CNAIR tenders came from the Salrom National Salt Society, on the basis of which salt supply contracts for snowfall were concluded.
The analysis shows that Salrom, the only company that exploits and sells salt for snow removal in Romania, generally has significantly lower prices in foreign markets (with strong competition) compared to domestic markets. which occupies de facto the monopoly.
Salrom's de facto monopoly on the salt-freeze market is also supported by the provisions of the Mining Act (No. 85/2003) and the possibility of extending the exploitation license initially granted for 20 years. (without Salrom) for successive periods of 5 years, without specifying maximum durability.
Thus, in order to stimulate the emergence of competition in the market, the Conseil de la concurrence is asking the Ministry of Economy to amend the relevant legislation, either by specifying a maximum number of extensions that could be granted by the competent authorities, either by increasing the validity of the operating license, to organize an auction for the exploitation of this perimeter.
In addition, in order to avoid the maintenance of the monopoly situation in the exploitation of salt and after the auction organization for the operating perimeters, the authority of the competition requests the National Agency for Mineral Resources (ANRM) to consider the possibility of not allowing a single operator to obtain operating licenses. cover more than 50% of the total salt production capacity in operation.
The Competition Council also believes that this sector could become competitive also through the emergence of other companies active in the exploitation and marketing of salt, as in the case of the start-up of the Valea Florilor reservoir in County Cluj. In this regard, the competition authority considers that the duration of 9 years since the signing of the concession contract for the perimeter of Flori Valley and up to now, without the decision of the government to approve the concession, is excessively long. In addition, we note that ANRM's request for the necessary documentation for the opening of the government's decision was made late, 8 years after the signing of the concession contract.
Whereas the delay of approval of the license by the government prevents the possibility of competition in the market, the competition authority asks the ANRM to accelerate the procedures leading to the 39, approval of the exploitation license by decision of the Government and at the beginning of the exploitation activities in the perimeter of Flori Valley.
The Competition Council found that the obstacle to entry on this market was the financial guarantee that the holder of the operating license (according to the technical instructions of the ANRM) must submit and which, for at 4 million lei, must be presented exclusively in the form bank deposit. The competition authority considers that this obligation is even worse because it can hinder the access of small and medium-sized enterprises to mining activities.
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At the same time, a larger financial guarantee may be provided by other forms of collateral, such as insurance policies written in favor of the holder from a recognized insurer.
Salt removal is a very important component of the Romanian salt extraction and trading sector, accounting for about a quarter of national production.
The preliminary report is submitted for public consultation on the website of the Competition Authority, www.consiliulconcurentei.ro.
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