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MPPGCL in its petition under the provisions of Competition Act, 2002 has sought CCI to investigate into this and declare that due to the abuse by CIL and SECL of its dominant position as a producer and supplier has caused loss and injury to it.
MPPGCL has joined the bandwagon as Maharashtra State Power Generation Company (MahaGenco) and couple of other generation companies have already filed pleas before CCI against alleged abuse of dominant position by CIL and its subsidiaries. CCI has already launched investigations into the alleged abuse of market dominance especially related to fuel supply agreements (FSAs).
MPPGCL said it has filed its petition before CCI due to the absence of coal regulator. MPPGCL officials declined to comment despite repeated attempts. MPPGCL’s petition is in the possession of Business Standard.
MPPGCL with an installed thermal capacity of 2932.5 MW in its petition has referred to the coal supplied to its 1,340 MW Sanjay Gandhi thermal power station by SECL as per the provisions of coal supply agreement (CSA) which are unfair, one sided and discriminatory and in violation of section 4 (2) (a) of the Competition Act, 2002.
Coal India’s decision to increase prices of A grade coal by 155% and of B grade coal by 163% through its notification of February 26, 2011 has resulted in huge financial burden and thereby rise in generation cost and power tariff charged to the consumers.
According to the MP generation company, the boilers of Sanjay Gandhi thermal power station are designed for a calorific value of around 3700 kilocalorie/kg but SECL is supplying higher grade of coal exceeding 5800 kcal/kg which is causing various technical problems to the plant besides being economically viable to the company.
Moreover, MPPGCL argued that higher grade coal is being supplied by SECL in particular with intent to restrict competition in the relevant market and tne entire conduct is based on the policy of “Pay Whether Agree or Not” basis. Under this method, the purchaser has to accept the coal whether he is satisfied or not with the qualities and quantities of coal supplied.
Even if the purchaser refuses to accept the said standard or lower coal, the delivery would be considered as “Deemed Delivery” and the purchaser would be bound to make the payment thereof. MPPGCL has prayed CCI to direct SECL to limit supply of G3 to G5 Band coal not more than 20% and in place supply G6 to G12 band coal.
MPPGCL said absence and denial of joint sampling of coal has led to deterioration of both the quality and quantity of coal.
