CCI rejects complaint against Railway Ministry

Observing that there is no “prima facie case”, fair trade regulator the Competition Commission of India ( CCI) has rejected a complaint alleging the Railway Ministry was abusing dominant position by charging different rates for transporting commodities.

The complaint, filed against the Railway Ministry and the Railway Board, had alleged that transportation charges were based on end use of commodities.

The CCI, in its order on December 13, said there was no evidence of violation of Competition Act.

“…In the absence of any prima facie case of violations of the provisions of the [Competition] Act, being made out on the basis of available material, the Commission is of the view that no interference is warranted by the Commission in this case,” it said.

As per the norms, the Railway Ministry and the Railway Board have the right to reclassify and revise the rates of commodities transported by railways in India.

“… The Commission is of the view that in exercise of its function of re-classification and revision of rates/freight no prima facie violation of the provisions of the [Competition] Act has been established,” CCI said.

Further, the regulator noted that the complainant — Mineral Enterprises — has not clearly defined the relevant market related to the case.

Mineral Enterprises, engaged in mining and exporting iron ore, alleged that the Railway Board has re-classified charges for transporting iron ore on the basis of its end use, resulting in different freights rates.

However, in a dissenting order, CCI member R Prasad said that prima facie, it can be concluded that unfair and discriminatory levy imposed by the Railways based on end use was affecting competition in the sector in an adverse manner.

Noting that there are no other operators in the railway services market or the railway freight market, Prasad said there is no doubt about the dominance of the Indian railways in this market.

“In fact in the market of rail freight services there is no substitutability and interchangeability with any other service,” Prasad said.