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Competition Commission of India has imposed a penalty of Rs 1,773.05 crore on Coal India Ltd for abusing its dominant position as a fuel supplier.
CCI was acting on a complaint by the Maharashtra State Power Generation Company Ltd and Gujarat State Electricity Corporation Ltd against Coal India and its subsidiaries (Mahanadi Coalfields Ltd, Western Coalfields Ltd, South Eastern Coalfields Ltd).
Mahagenco complained that CIL had been supplying low quality coal at higher prices and putting in place non-transparent contract conditions on quality and other supply parameters.
CCI in its final order held that CIL through its subsidiaries operates independently of market forces and enjoys undisputed dominance in the relevant market of production and supply of non-coking coal in India.
The Commission inter alia also held CIL and its subsidiaries for imposing unfair/discriminatory conditions in Fuel Supply Agreements (FSAs) with the power producers for supply of non-coking coal.
The anti-monopoly watchdog also issued a cease and desist order against CIL and its subsidiaries besides directing modification of FSAs in light of the findings and observations recorded in the order.
The impugned clauses related to sampling and testing procedure, charging transportation and other expenses for supply of ungraded coal from the buyers, capping compensation for supply of stones etc.
Further, for effecting these modifications in the agreements, CIL was ordered to consult all the stakeholders. It was also directed to ensure parity between old and new power producers as well as between private and PSU power producers, as far as practicable.
CCI has been dealing with seven cases of alleged abuse of dominant position by CIL.
Coal India accounts for over 80 per cent of the 530 million tonnes of coal produced in the country.
When contacted Coal India spokesperson said, “We have not received the order till now. We would be able to comment only after reading the order”.
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