Competition Commission of India

XYZ v. REC Power Distribution Company Ltd.

05.05.2016

MRTP/ Competition Laws

Complaints against REC miss the mark

The Competition Commission dismissed a matter against Rural Electrification Corporation Power Distribution Company Limited, a wholly owned subsidiary of Rural Electrification Corporation Limited for lack of evidence.

The Commission heard submissions that RECPDCL was using its affiliation with REC to gain unequal advantages, however noted the claims to be unsubstantiated. No evidence was adduced to show that REC had leveraged its dominant position in the rural electrification market to further RECPDCL’s business interests.

Also mindful that RECPDCL’s entry into the market affected the business opportunities of other players, CCI was again unable to conclude the same due to paucity of evidence.

REC, incorporated in 1969 to finance and promote rural electrification projects in the private and public sector, is the nodal agency for implementing the Rajiv Gandhi Grameen Vidyutikaran Yojana. Its tasks are to primarily finance state sector power utilities, electricity boards, and private power developers. RECPDCL focuses of developing and investing in electricity distribution activities.

The complaint levelled against RECPDCL claimed it using its relationship with REC to secure consultancy services in relation to proposed rural electrification projects. It was alleged to have done so by giving verbal assurances that approvals for financing such projects would be received from REC. Also alleged was RECPDCL not tendering work according to principles laid down by Central Vigilance Commission, choosing instead to nominate work.

Tags : rural electrification public sector dominant position

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