Bid rigging: CCI slaps Rs 12cr fine on coal transportation cos

18 September 2017

The Competition Commission today imposed nearly Rs 12 crore penalties on 10 coal and sand transportation entities for rigging bids for tenders floated by a Coal India Ltd subsidiary.

The companies and their office bearers have also been directed to “cease and desist” from anti-competitive practices.

After a detailed investigation on a complaint filed by Western Coalfields, the regulator found that these entities indulged in bid rigging.

Western Coalfields moved the Competition Commission of India (CCI) after they quoted identical bids at higher rates for four tenders floated for coal and sand transportation.

The regulator has imposed a penalty totalling little over Rs 11.8 crore on the 10 entities as well as on eight office bearers for rigging bids, according to a 71-page order.

These entities are: SSV Coal Carriers Pvt Ltd, Bimal Kumar Khandelwal, Pravin Transport, Khandelwal Transport, Khandelwal Earth Movers, Khanduja Coal Transport Co, Punya Coal Road Lines, B Himmatlal Agrawal, Punjab Transport Co and Avaneesh Logistics Pvt Ltd.

“Infringing anti-competitive conduct of the OPs (Opposite Parties) is bid-rigging in the tenders floated by the Informant for transportation,” the regulator said.

The penalties for each of the 10 entities and related officials amount to 4 per cent of their average income in the last three financial years.

“The impugned tenders were for procurement of transportation services by a public utility in connection with its mining operation. The importance of services procured under public procurement needs hardly any emphasis,” the watchdog said.

Further, the CCI said it is also not oblivious of Western Coalfield’s practice of dividing the tender work amongst bidders who give identical price quote.

“The Commission noted that such conduct in public procurement besides defeating the tendering process, has an adverse impact on the process of competition resulting in deprivation of efficient outcomes that would have followed otherwise,” an official release said citing the CCI order.

In July 2015, the CCI had ordered a probe by its investigation arm Director General (DG) and the report was submitted in January 2016 wherein it was concluded that the entities had indulged in bid rigging.

Besides, the DG had found eight officials also responsible for the anti-competitive conduct of these entities.

Source-business-standard