Competition Commission slaps Rs 1,773 cr penalty on Coal India

Dec 10 2013, 18:21 IST
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Coal India has been found to be imposing unfair conditions in FSAs with the power producers for supply of non-coking coal. Coal India has been found to be imposing unfair conditions in FSAs with the power producers for supply of non-coking coal.
SummaryCoal India has been found to be imposing unfair conditions in FSAs with the power producers.

Fair trade watchdog Competition Commission has slapped a fine of Rs 1,773.05 crore on Coal India for allegedly abusing dominant position in supply of the dry fuel -- its first major penalty on a state-owned company.

Competition Commission of India (CCI) has found Coal India is operating independently of market forces and enjoys an undisputed dominance the market for production and supply of non-coking coal in the country.

The penalty of Rs 1,773.05 crore was imposed by CCI through an order dated December 9, an official release said today.

The ruling has come on complaints filed by Maharashtra State Power Generation Company and Gujarat State Electricity Corporation against Coal India and its three subsidiaries -- Mahanadi Coalfields, Western Coalfields, South Eastern Coalfields.

According to the release, Coal India and its subsidiaries have been found to be "imposing unfair/discriminatory conditions in Fuel Supply Agreements (FSAs) with the power producers for supply of non-coking coal". Such conditions violate fair trade norms.

Apart from issuing a cease and desist order against Coal India and its subsidiaries, CCI has directed modification of FSAs.

Besides, the regulator has asked the company to consult all the stakeholders for making the modifications in the FSAs.

"CIL 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," the release said.

In recent times, Coal India has drawn flak for fuel shortages that have been hurting the country's power generation.

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