CCI resumes probe into Rlys-SAIL 'exclusive pact'

Competition watchdog CCI has restarted its investigation into the "exclusive agreement" between the Railways and state-run steel maker SAIL for supplying rails as it has prima facie found the pact anti-competitive in nature.

The case pertains to a complaint by private steel producer Jindal Steel and Power with the Competition Commission of India (CCI) alleging that "the exclusive supply agreement" entered into between the Railways and SAIL would kill its chance of bagging the contract through competitive bidding process.

"We have resumed investigations after hearing SAIL's view on the matter, as directed by the Competition Appellate Tribunal (Compat)," a CCI source told PTI.
    
When contacted, SAIL officials declined to comment saying the matter is subjudice.
    
The Compat, on an appeal by SAIL demanding more time to present its case, had earlier stayed an earlier probe ordered by the CCI contending that the state-run steel maker be heard before the case is referred to the CCI director-general for investigations. Parties are usually given 15 days to respond to notices by the Commission.
    
In the meanwhile, the CCI moved the Supreme Court to seek clarity if a party could appeal before the Compat even before the CCI passes its order against the party, as in the Jindal Steel-SAIL issue. The case is pending before the apex court.
    
In its complaint, Jindal Steel has alleged that SAIL and the Railways have violated sections 3 and 4 of the Competition Act 2002 by entering into an anti-competitive agreement and abusing its dominant position in the market.
    
An Act of Parliament passed in 2002 gives CCI the powers to admit complaints relating to abuse of dominant position and anti-competitive agreements. However, with the notification of sections 5 and 6 of the Act, the CCI would be able to vet mergers and acquisitions which could have a bearing on competition in the marketplace.
    
The CCI aims at preventing practices that have adverse effect on competition, promoting and sustaining competition in markets, protecting the interests of consumers and ensuring freedom of trade carried on by other market participants.