Lift Part Suppliers Provide Commitments To CCCS To Facilitate Lift Maintenance In HDB Estates
1. The Competition and Consumer Commission of Singapore (“CCCS”) has concluded its investigations into the supply of lift spare parts for the maintenance of lifts, after accepting voluntary commitments provided by Chevalier Singapore Holdings Pte. Ltd. (“Chevalier”) and Fujitec Singapore Corporation Ltd. (“Fujitec Singapore”) which address the competition concerns raised by CCCS in relation to the supply of their respective brands of lift spare parts. Including Chevalier and Fujitec Singapore,CCCS has, in total, accepted commitments provided by five companies of similar nature.
2. CCCS has investigated alleged refusals to supply lift spare parts for the maintenance of lifts in Housing & Development Board (“HDB”) estates. Typically, multiple brands of lifts are installed in each HDB estate. Town councils can choose to either appoint the original lift installers of the respective brands to undertake the maintenance services, or engage third-party lift maintenance contractors to provide lift maintenance services for multiple brands of lifts within the estate. There could potentially be cost savings in engaging a third-party lift maintenance contractor for multiple brands as compared to procuring lift maintenance services from each original lift installer.
3. Lift contractors who wish to bid for lift maintenance projects that include multiple lift brands would require brand-specific lift spare parts. If a lift company or distributor does not provide proprietary but essential lift spare parts to third-party lift maintenance contractors, these third-party lift maintenance contractors may be prevented from effectively competing for contracts to maintain and service lifts of that particular brand.
Chevalier and Fujitec Singapore
4. In January 2019, CCCS launched public consultations on the proposed commitments provided by Chevalier and Fujitec Singapore in relation to the supply of lift spare parts to third-party lift maintenance contractors.
5. During the public consultations, queries were raised regarding the amount of time taken for a purchaser to obtain a spare part from these two companies. CCCS notes that the commitments already provide that Chevalier or Fujitec Singapore shall send an order for the spare parts to the manufacturer within seven working days of receiving the purchaser’s request. It is reasonable for the purchasers, rather than Chevalier and Fujitec, to bear the costs of maintaining excess spare part inventory stock to meet their obligations in servicing the lifts. Contractors who have been engaged to maintain and service the lifts are also in a better position than Chevalier and Fujitec to plan for and hold spare part inventories. CCCS highlights that it would be prudent for lift owners to continue to ensure that their appointed lift maintenance contractors maintain sufficient inventories of spare parts to service and maintain the lifts.
6. There were also queries on whether purchasers are required to provide their confidential maintenance service contracts to Chevalier and Fujitec to prove that they have been appointed to maintain the relevant brand of lifts. CCCS confirms that there is no requirement to provide the maintenance service contracts as proof of appointment. Instead, any documentary proof that affirms the lift owner has appointed the purchaser to maintain the relevant brand of lift would suffice.
7. The voluntary commitments provide that Chevalier and Fujitec will undertake to sell lift spare parts (with software if applicable) of the relevant brands to a purchaser on a fair, reasonable and non-discriminatory basis, subject to certain terms and conditions. CCCS considers that the voluntary commitments fully address the competition concerns that third-party lift maintenance contractors may be prevented from effectively competing for contracts to maintain lifts of a particular brand if lift companies refuse to supply essential spare parts of that brand. Following the acceptance of the voluntary commitments, CCCS concludes its investigations into the supply of lift spare parts for the maintenance of lifts.
Please refer to https://www.cccs.gov.sg/media-and-consultation/newsroom/media-releases/lift-suppliers-chevalier-fujitec-commitment-acceptance for more information.