Coal India under fire for abuse of dominance

Coal India is again under fire from the Competition Commission of India for abusing its dominant position in supplying fuel to power plants.

The regulator is investigating a complaint filed by the West Bengal Power Development Corporation. The complaint accuses Coal India of having different clauses in fuel supply agreements for coal supply to thermal plants, and supplying lower-grade coal.

Finding

prima facie evidence of abuse of its dominant market position, the Commission has ordered a probe against Coal India and its three subsidiaries — Eastern Coalfields, Bharat Coking Coal and Mahanadi Coalfields.

The Association of Power Producers had also questioned the basis of having different fuel-supply agreements for independent power producers (IPPs) and public sector companies. Protests have also been voiced against CIL’s unilateral right to terminate supplies and seek security deposits. Questions have also been raised over the mechanism for settlement of disputes.

“Taking advantage of their dominant position, the opposite parties were allegedly not adhering to the terms and conditions in the Fuel Supply Agreements and conducting themselves in a manner detrimental to the interest of the informant,” CCI noted.

Coal India accounts for over 80 per cent of the 530 million tonnes of coal produced in the country. Coal-based electricity accounts for about 86 per cent of the total electricity generated in India

bindu.menon@thehindu.co.in