CCI orders fresh probe against CIL

It is alleged that CIL and one of its subsidiaries abused their dominant position in the market for production and supply of coal

The Competition Commission has ordered a fresh probe into allegations that state-run Coal India and one of its subsidiaries abused their dominant position in the market for production and supply of coal.

The latest probe has come on a complaint filed by GHCL Ltd which has alleged that the coal miner and its subsidiary, Western Coalfields, had slapped unfair conditions in fuel supply agreements (FSAs) with the power producers for supply of non-coking coal.

A similar complaint was earlier filed by Maharashtra State Power Generation Company and Gujarat State Electricity Corp against Coal India.

After a probe into this case, CCI passed an order in December 2013 against CIL and imposed a penalty of Rs 1,773 crore as the state-run company and its subsidiaries were found to be dominant in the market. However, Coal India has approached Compat challenging CCI's order following which the penalty on the firm has been stayed by Compat.

"As the allegations in the present case also have been made by the informant in the context of requirement of coal for its captive power plant, the relevant market in this case would also be on the similar lines," the Competition Commission of India (CCI) said in a order released today.

"Taking into account the averments and the allegations made by the informant (GHCL), the Commission is of prima facie view that the opposite parties appear to have contravened the provisions of...The (Competition) Act by imposing unfair terms and conditions upon the informant," CCI added.

Among others, GHCL had complained to CCI that Coal India and Western Coalfields "had abused their dominance by dictating the terms and conditions of supply of coal through Letter of Assurance, FSA, MOU and the addendum to FSA by imposing such one-sided onerous conditions upon the buyers without seeking, much less considering, the inputs of the power producers and have thus acted independent of the market forces."

GHCL is engaged in the business of manufacture and sale of soda ash, a basic industrial raw-material predominantly used in manufacture of glass (flat/container), detergent, chemicals and silicates.

The company had commenced its commercial production of soda ash in 1986 at its manufacturing facility at Sutrapada, District in Gujarat.