Industry

Coal India pulled up for unfair FSA terms

A protest against the coal scam. The fair trade regulator’s investigations come at a time when acute coal shortages are hurting power generation in the country. File Photo: PTI

A protest against the coal scam. The fair trade regulator’s investigations come at a time when acute coal shortages are hurting power generation in the country. File Photo: PTI  

The Competition Commission has ordered another probe into the allegations that state-run Coal India and its subsidiaries abused dominant market position in supplying fuel to power plants.

The latest investigation against the country’s largest coal miner comes on a complaint filed by West Bengal Power Development Corporation.

The Commission has already ordered probe in the wake of five complaints against CIL and in at least three cases, the investigation reports have been submitted to the regulator.

Finding prima facie evidence of abuse of dominant market position, the Competition Commission of India (CCI) on July 5 ordered probe against Coal India and its three subsidiaries.

They are Eastern Coalfields, Bharat Coking Coal and Mahanadi Coalfields.

”...the Commission is of the opinion that the present case was a fit case for investigation into the allegations made by the informant about violation of provisions of Competition Act,” CCI said.

As per the latest complaint, Coal India imposed unfair conditions in the Fuel Supply Agreements (FSA) for providing coal to thermal power plants.

Coal India is in a dominant position as it accounts for about 82 per cent of coal supply in the country, according to the Commission.

“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.

Noting that the FSA’s terms and conditions were being “heavily loaded in favour of opposite parties”, the Commission said the consumer had no alternative but to depend on them for fuel supply.

Earlier, the Commission had ordered probe against Coal India and its subsidiaries following complaints from different entities including Maharashtra State Power Generation Company (MAHAGENCO).

MAHAGENCO had complained against Coal India and its two subsidiaries — Mahanadi Coalfields Ltd (MCL) and Western Coalfields Ltd (WCL).

The fair trade regulator’s investigations come at a time when acute coal shortages are hurting power generation in the country.

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Printable version | Jun 4, 2020 10:19:04 PM | https://www.thehindu.com/business/Industry/coal-india-pulled-up-for-unfair-fsa-terms/article4908850.ece

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