State-owned power generating companies are approaching the competition watchdog CCI to complain against Coal India Ltd's (CIL) alleged abuse of monopoly power, which utilities say leads to unfair sales pacts, arbitrary price increases, poor quality of supplies and non-adherence to penalty clauses in supply agreements.
After Maharashtra took up the issue with Competition Commission of India (CCI), states like Gujarat and Madhya Pradesh have all filed petition against CIL's arm-twisting power generating companies into paying more for poor quality coal. Chhattisgarh, Punjab and West Bengal are also contemplating approaching CCI.
Although NTPC, the largest coal consumer of CIL has no plans of knocking at CCI's door, the Commission sought enough information from NTPC based on the complaint filed by Maharashtra. "We were asked to furnish a bunch of information on the quality of coal and the price they charge. Our officers have already sent their inputs to CCI," senior NTPC officials told ET.
According to the complaint filed by Maharashtra's power generating company, CIL abuses its dominant position consistently to supply inferior-quality coal. It has also alleged that the coal-supply pact does not protect the purchaser from poor quality coal.
Having prepared a few hundred-page report following the complaint by Mahagenco, the case was scheduled to come up for hearing in May. However, CIL has asked for another month's time to prepare its answers. This, in fact, is the second time CIL has asked for more time.
Gujarat State Electricity Corporation Ltd (GSECL), has recently filed a complaint with the CCI involving South Eastern Coalfields. "We filed a complaint a few weeks ago. Our allegations involve supply of poor quality coal by the company and a huge difference between the quality billed by the company and the quality of coal received. We lose money in the process, which becomes a heavy burden on us as well as our consumers. We have also complained against the lopsided coal supply pact that we have been forced to sign," a GSECL official said.
"We closely monitored Mahagenco's move when it approached the Commission. It is only after CCI prepared its report based on allegations made by Mahagenco that we decided to approach the judicial body," he said.
Madhya Pradesh and Gujarat have filed their complaints more or less at the same time. "We filed a complaint with CCI about quality mismatch. There is a large difference between the grade they claim they supply and the quality of coal we receive at our generating stations," said Mohammed Suleman, energy secretary from the MP government and chairman of MP Power Generating Company Ltd (MPPGCL). "We have been suggesting the average between the grade they claim to supply and the one we receive should be used to bill for the coal that's sent to us. However, CIL has rejected the proposal," he added.
Source- Economic Times