MUMBAI, June 24: Even as the Builders’ Association of India (BAI) has welcomed CCI’s action of imposing penalties on cement companies, it has said that it may not act as a deterrent to the alleged malpractices by cement manufacturers in view of the money power they have.
Last week, the Competition Commission of India (CCI) had slapped Rs 6,307 crore penalty on 11 cement companies for forming a cartel. The period of investigation for the 11 companies ranges between May 20, 2009 and March 31, 2011. It has concluded that cement makers have controlled the supply through under-utilisation of capacity.
BAI has urged the CCI to review the quantum of penalty and also to conduct an enquiry into the losses incurred by contractors due to such ‘profiteering’ by cement manufacturers and consider reimbursing the losses to the contractors.
According to D L Desai, trustee of BAI, they had urged CCI to impose a fixed percentage of the penalty as a deposit with the CCI in case the cement manufacturers approach the ‘Appellate Authority’.
The CCI found various discrepancies in the working of the cement companies, which included deliberate under-utilisation of production capacity to create scarcity in the market and hence lead to an artificial inflation of prices.
Anand Gupta, secretary of BAI said, “We are happy that CCI has taken action to penalise the cement companies, as it would give a boost to the construction industry leading to the revival of our economy, which is currently going through a difficult phase. The construction industry is a major driver of Indian economy and any unfair practices as indulged in by the cement companies have adverse impact not only on this industry but the overall economy.” (PTI)
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