CIL moves CCI against explosive manufacturers

PTI New Delhi | Updated on February 20, 2011

Coal India has moved the competition watchdog CCI against explosive manufacturers, alleging that the players are forming a cartel while quoting bids floated by the coal PSU, thereby, killing its right to procure the product at a fair prices.

Coal India’s complaint comes within months of a similar complaint filed by the Explosives Manufacturers Association of India (EMAI) that CIL was procuring 20—22 per cent of its requirement from a single explosives manufacturer without inviting bids.

If found true that explosive manufacturers were forming cartel by quoting similar price, CIL’s decision to procure product without inviting bids would be justified, sources said.

“Coal India has filed its complaint against sections 3 and 4 of the Competition Act 2002. They have alleged that the EMAI form a cartel and quote similar price for a bid and therefore, CIL is not being able to get a fair price deal,” a senior CCI official told PTI.

Sections 3 and 4 of the Competition Act pertain to anti competition agreement and abuse of dominant market position, respectively.

The Commission, the official said, will take a prima facie view on the matter within a fortnight after carrying out preliminary investigation into the allegations.

CIL, which accounts for around 85 per cent of the coal produced in the country, needs explosives to remove the soil layer covering coal deposits in mines.

Gulf Oil, Indian Oil and Indian Explosives are some of the main suppliers of mining explosives to CIL.

Interestingly in May last year, the EMAI had complained to the CCI that CIL did not give other suppliers a fair chance to compete through bids.

Subsequently, the Director—General (Investigations) of the CCI was asked to investigate the allegations.

The CCI, which became fully functional in July last year, is the country’s anti competition and anti trust body, formed under an act of Parliament.

Published on February 20, 2011

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