CCI slaps Rs 591 crore penalty on Coal India; says ensure uniformity between private, public power producers

By: | Updated: March 24, 2017 6:26 PM

CCI has also directed Coal India to ensure uniformity between private and public power producers in fuel supply pacts.

CCI, penalty on Coal India, Coal India, private public power producers, Competition Commission of India, PSU, fuel supply agreements, ONGC, Indian Oil Corporation, IOC, public sector enterprisesCompetition Commission of India (CCI) has slapped a whopping Rs 591 crore penalty on public sector undertaking (PSU) Coal India over the unfair conditions in fuel supply agreements. (Reuters)

Competition Commission of India (CCI) has slapped a whopping Rs 591 crore penalty on public sector undertaking (PSU) Coal India over the unfair conditions in fuel supply agreements. CCI has also directed Coal India to ensure uniformity between private and public power producers in fuel supply pacts. This comes on the same day that Coal India, along with ONGC and Indian Oil Corporation (IOC) emerged as star financial performers among India’s central public sector enterprises in 2015-16, a government survey showed.

This is not the first time Coal India has faced charges by CCI, previously the regulator has found the company violating norms by “imposing unfair/ discriminatory conditions in the matter of supply of non- coking coal to power producers, PTI reported. CCI said that “Coal India did not “evolve/ draft/ finalise the terms and conditions of FSAs (Fuel Supply Agreements) through a mutual bilateral process and the same were imposed upon the buyers through a unilateral conduct”.

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The regulatory body has asked Coal India to modify the fuel supply agreement and ensure uniformity between old and new power producers as well as between private and public power producers. The penality of Rs 591.01 crore translates to one per cent of Coal India’s average turnover for the three-year period from 2009-10 to 2011-12, PTI reported.

“Specifically, Coal India Ltd is directed to incorporate suitable modifications in the fuel supply agreements to provide for a fair and equitable sampling and testing procedure,” the order said. CCI has suggested that besides international best practices, Coal India should try to sample at the unloading-end in consultation with power producers. CCI gave its ruling after a complaints were filed by Maharashtra State Power Generation Company and Gujarat State Electricity Corporation on Coal India and its three subsidiaries — Mahanadi Coalfields, South Eastern Coalfields and Western Coalfields.

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