ARSHIYA RAIL HAULS MINISTRY OF RAILWAYS BEFORE CCI

Container train operator Arshiya Rail has approached the Competition Commission of India (CCI) with a complaint against the Railway Ministry, after the latter introduced steep hikes in haulage charges for container operators. The Railway Ministry, in September, raised haulage charges by 170-200 per cent for movement of heavy commodities — cement, stone other than marble, iron and steel, alloys and metals, and petroleum products — by container train operators. While the increase was initially proposed for both domestic and export-import traffic, the Ministry later exempted export-import cargo and domestic movement of ceramic tiles and white cement from the hike. The new rates are effective from December 1, 2010. These operators pay haulage charges to the Railways for use of its locomotives, tracks and other infrastructure making them largely dependent on the Railways. For these players, the haulage charges account for nearly 70 per cent of the operating cost. The complaint has been made under Section 4 of the Competition Act, which deals with abuse of dominant position, sources said. The CCI is considering if there is a prima facie case and, if required, will get the case examined by its investigation arm. The Ministry's move was perceived by the operators to be ‘anti competitive' as it discouraged domestic movement of heavy commodities. The level of traffic moved by container operators pales in comparison with Indian Railways, which itself transports commodities such as cement, iron and steel, metals and petroleum products in bulk. 

Source: The Hindu Business Line, January 22,2011

CCI TO CONTINUE ENQUIRY AGAINST REALTY MAJOR DLF: COMPAT

Rejecting the plea of realty major DLF Ltd, competition appellate body COMPAT ( Competition Appellate Tribunal) has allowed watchdog CCI to continue with its enquiry against the company, which is under the scanner for allegedly misusing its dominant market position. 

     DLF had moved the Competition Appellate Tribunal (COMPAT) against the Competition Commission of India (CCI) for initiating a probe without hearing the accused. “COMPAT has dismissed DLF’s appeal that sought a stay on the CCI enquiry against it. They had appealed under Section 33 of the Competition Act saying that no enquiry can be initiated unless reasons are recorded to arrive at an ‘opinion’ that a ’prima-facie case’ exists,” an official said. The investigations against the realtor is already complete, with the Director General having found DLF violating, besides others, Section 4(2)(a) of the Competition Act. A company violates Section 4(2)(a) of the Competition Act when it directly or indirectly imposes unfair or discriminatory condition or price in purchase or sale of goods or services. In its report to the CCI, the Director General has sought initiation of action against DLF under various sections of the Competition Act, 2002. Following provisions in the Act, the CCI has sent a show cause notice to DLF asking it to explain itself vis-a-vis the findings of the DG, after which both the accused and aggrieved parties would be heard and subsequently a final order would be passed by the Commission. 

      In May, on the basis of complaints by some people who booked flats in DLF projects, the CCI had referred the matter for a probe by the Director General Investigations). According to one such complaint, DLF had promised to complete its residential project in Gurgaon called Belaire in 2009, but the buyers are yet to get possession. Another individual has alleged that for its Height project, DLF had initially announced it as an 18-floor apartment, but later on added 10 more storeys without informing the buyers.

Source: The Hindu Business Line, January 26, 2011