3.6 To analyse the existence of cartelisation in the case, the DG first examined the basis of pricing of bids by the OPs from the standpoint of both the Informant and the OPs. To this end, the DG required the Informant to provide a cost break-up of PVC flooring (CG-12). In response, the Informant submitted that it did not calculate the internal costing of the Product. The reasonability of rate was determined by it as per Last Purchase Rate (LPR), if available, in its own railway zone or in other railway zones. In case this was not available, then the rate of similar items was taken as the basis for deciding the reasonability of rates. When the rates quoted in tender were quite high compared to LPR, only then costing of the item was done. Moreover, costing was done when the item was being procured for the first time. Therefore, internal costing was done on need basis only. Regarding estimated cost of the Product in the instant case, it was found that the Informant had not done any rate analysis for purchase of the Product. The reasonability of rate had been seen on the basis LPR. However, as per the Railway Board letter dated 14.02.2007, which was issued at the time of introduction of material in the railway in the year 2007, the tentative cost of the Product was Rs. 55000/- per coach set and technical department of NWR advised that in each coach approximately 80 sqm of PVC flooring would be required after including compartment space, doorway and lavatory. Therefore, the price of the Product worked out to approximately Rs.
