New Delhi: State-run Coal India has come under the scanner of competition watchdog CCI for tying up supply of mining explosives from a particular company without inviting bids, but the PSU denies doing anything anti-competitive.
On a complaint by the Explosives Manufacturers Association of India (EMAI) that CIL was procuring 20-22% of its requirement from a single explosives manufacturer without inviting bids, which is killing competition in the market, the Competition Commission of India (CCI) has asked its director-general to investigate the allegations.
CIL, which accounts for around 85% of the coal produced in the country, needs explosives to remove the soil layer covering coal deposits in mines.
“The association (EMAI) had complained that CIL has not given other suppliers a fair chance to compete through bids. We have also found that prima facie the agreement between Coal India and the other company (is) anti-competitive and therefore, it is a case fit for investigation by the commission,” a CCI official told PTI.
However, CIL refuted the allegations and expressed confidence that the commission would consider the matter carefully.
“The allegations are misleading. We have tied up a certain portion of supply with a PSU simply for supply security, as explosives are very sensitive and that is nothing anti-competitive. We are sure the CCI will give us a chance to explain our part and understand our concern,” a senior CIL official said on condition of anonymity, as the matter is under investigation.
Gulf Oil, Indian Oil and Indian Explosives are some of the main suppliers of mining explosives to CIL.
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. The complaint by EMAI was admitted under sections 3 and 4 of the Competition Act, 2002, which refer to anti-competitive agreements and abuse of dominance, respectively.