The Competition Commission of India’s investigations arm may have evidence of Coal India Ltd subsidiaries using their dominant position in drafting fuel-supply agreements and also supplying low quality coals at higher prices.

On analysis of data, the Director-General Investigation (DGI) has found evidence of abuse of dominance, said Competition Commission sources.

Coal India accounts for over 80 per cent of the 530 million tonnes of coal produced in the country.

The Competition Commission refers issues to the DGI for probe only if it finds a prima facie case. The DGI investigates after which the competition panel gives its order.

The cases relate to two complaints filed by customers of CIL and its subsidiaries. The first is by Maharashtra State Power Generation Company (Mahagenco) against CIL and Mahanadi Coalfields (MCL) and Western Coalfields (WCL) against abuse of their dominant market position.

Mahagenco complained that CIL has been supplying low quality coal at higher prices and putting in place non-transparent contract conditions on quality and other supply parameters.

The other complaint, by the Association of Power Producers (APP), questioned the basis of having different fuel-supply agreements for independent power producers (IPPs) and public sector companies. Also, protests have been voiced against CIL’s unilateral right to terminate supplies, seeking security deposits and the mechanism for settlement of disputes between the supplier and the buyer.

When contacted, a senior official in Western Coalfields Ltd, said: “It is true there is a case and the matter is sub judice. However, we have not got notice from CCI on the same.”

Earlier, the CCI had written to all major coal consumers, including NTPC and DVC, seeking information related to the probe. Last year, the CCI penalised cement firms for cartelisation. The real estate sector, too, has faced its wrath.

>bindu.menon@thehindu.co.in

Related Topics