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Tribunal orders inquiry into Mahagenco coal liasoning work

Mahagenco has received a major jolt as the Competition Appellate Tribunal (Compat) has ordered an inquiry into its coal handling contracts. The inquiry is to be conducted by the director general of Competition Commission of India (CCI). The report is to be submitted to CCI within three months.

According to the petitioner Surendra Prasad, a Nagpurian, the three liasoning agents have formed a cartel and Mahagenco does not allow any other company to do coal handling work. The agents' job is to ensure that Mahagenco gets adequate and quality coal from mining companies and it is transported smoothly to the power plants.

Prasad had lodged a complaint with Competition Commission of India (CCI), which turned it down by a majority verdict. He then approached the tribunal against the order. The complaint was regarding cartel formation in Mahagenco's coal handling contracts. The company's agents Nair Coal Services, Karam Chand Thapar & Bros and Naresh Kumar & Co were made respondents in the petition.

The history of Mahagenco's coal handling contracts is quite controversial. In March 2005, Mahagenco floated tenders for coal handling contracts. BSN Joshi emerged the lowest bidder but work was not given to it on technical grounds. Joshi approached the Supreme Court, which ruled in his favour and directed Mahagenco to give him the job.

Mahagenco chose not to follow the order and kept on awarding the contracts to the cartel. Joshi then filed a contempt petition. The then managing director of Mahagenco, Ajoy Mehta, filed an apology and promised to give the job to Joshi. Accordingly, the firm got the contract in January 2009. However, its tender was terminated in September 2009 on grounds of unsatisfactory performance.

Since then the cartel has been doing the coal handling work. Compat chairman Justice GS Singhvi noted in the order that between 2009 and 2013 four tenders were floated for awarding coal handling contracts but they were cancelled on some or other grounds. The three agents were given extension every time.

Aggrieved by the cartel formation Prasad approached CCI. But, CCI turned down his plea. However, the judicial member Justice SN Dhingra noted that Mahagenco had colluded with the three agents and hence the case was fit for an inquiry by director general of CCI.

TIMELINE

March 2005 | Mahagenco floats coal handling tender, BSN Joshi not given work in spite of being lowest bidder

October 2006 | SC directs Mahagenco to award tender to Joshi, Mahagenco ignores it

December 2008 | Mahagenco tenders apology in SC to avoid contempt of court

January 2009 | Joshi given coal handling contract

September 2009 | Joshi's contract terminated by Mahagenco

September 2009 | Nairsons, Karam Chand Thapar and Naresh Kumar given the work on extension basis

November 2013 | The three companies bag tenders called after four years

December 2013 | CCI turns down petition filed by Nagpurian Surendra Prasad

September 2015 | Competition Appellate Tribunal overturns CCI order

source: http://timesofindia.indiatimes.com