Bengal govt joins battle against CIL

The West Bengal Power Development Corporation (WBPDCL), a state government entity, has taken the Union government-controlled Coal India Ltd (CIL) to the competition regulator, alleging "abuse of monopolistic position in production and supply".

"We have filed a petition before the Competition Commission of India in this regard," Malay De, principal secretary of the state power department and one of the directors of WBPDCL, told Business Standard. It has joined a group of state power utilities which have decided to seek a remedy from the regulator.

WBPDCL had written to the Kolkata-based RP-Sanjiv Goenka group's power utility company, CESC, to join the petition. Asked to confirm, Sanjiv Goenka, CESC chairman, said: "There are certainly issues with Coal India's policies and such matters. But as a company we always want to avoid any kind of confrontation."

WBPDCL petitioned CCI soem days earlier. Today, state Chief Minister Mamata Banerjee criticised CIL's decision to raise the prices of coal. "Coal India has again increased the price of lower grade coal...The decision is scandalous," Banerjee said on a social networking site. CIL yesterday raised the prices of low-grade coal by up to 11 per cent and cut prices of premium quality coal by 12 per cent. Similar to Maharashtra State Power Generation Company (MahaGenco), the first state utility to move CCI against CIL, the WBPDCL petition mainly highlights the grade-slippage issue, saying the Fuel Supply Agreement does not protect the purchaser on the issue of supply of poor quality of coal supplied.

"There are several issues in the agreement that affect purchasers. CIL does not provide any gurantee to supply a certain quality of coal. Also, we do not get the assured quantity because of transport loss," an official in the Bengal government said.

Last year MahaGenco had petitioned CCI against CIL and its subsidiary, Western Coalfields Ltd. Later, the governments of Gujarat and Madhya Pradesh joined the battle against CIL, alleging quality mismatch. During the investigation into MahaGenco's petition, CCI had written to all major coal consumers for information. WBPDCL had then expressed its views before the commission as an "additional informant" in that case, along with NTPC and Damodar Valley Corporation. This time, it has filed an independent petition.

NTPC had also recently raised the issue of acceptable quality of coal and losses during transport. CIL, however, refused to give such an assurance in the agreement, saying there were existing mechanisms for quality checks and CIL could not take responsibility for what happenned to coal enroute.