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The Competition Commission of Pakistan (CCP) has declared that M/s Pakistan International Bulk Terminal Limited (PIBT) is the only coal handling terminal in Pakistan, and that it was against any discriminatory actions on part of the terminal.

This has been stated by the CCP in its enquiry report against the PIBT regarding the rates implemented by PIBT for handling of coal at its terminal located at Port Qasim (PQ). The complainant alleged that the terminal has increased handling tariff thrice during the period September 2018 to December 2018 and has implemented ancillary charges without objective basis that is adversely affecting the industries relying on coal.

The CCP Enquiry Committee observes that the PIBT is the only coal handling terminal in Pakistan and importers are left with no option but to import through it. Coal is primarily used by power plants and the cement sector. Any prima facie discriminatory actions on part of the PIBT have an adverse impact on competition. For example, favorable terms and discounts by PIBT to one cement company and not to another would adversely impact the latter's costs and its ability to compete.

It was alleged that since the PIBT is the only port left in the country to deal with coal imports, it started abusing its dominant position by charging exorbitant tariff rates from all coal importers. It was further alleged by the complainant that the PIBT is charging its customers including the complainant in US dollar as opposed to Pakistani rupee, which as cost component affects the cost of production.

In the complaint, it is prayed that the commission may: declare the increase of tariff as unlawful; establish price mechanism in consultation with all stakeholders of the industry; to refund within 15 days the excess tariff charged to the complainant; to provide minimum 20 days storage time as was practice at KPT; retrain respondent from charging tariff in US dollars; and restrain respondent from charging additional charges.

Based on prima facie findings, it appears that the following practices of the PIBT are discriminatory: discrimination in provision of discounts on ancillary charges; different discounts (and hence net ancillary charges) for different customers; discrimination in provision of storage services: some customers have been given 20 days of storage and others 15 days (not correlated to quantity) and discrimination in requirement for advance payment.

Based on the findings, it appears that the KPT is barred from handling coal therefore the only other available option available for commercial importers and consumers of coal is through PIBT. At PQ two berths/terminals are available for discharge of coal: the PIBT and the Marginal Wharf, however, all coal arriving at PQ is being discharged at PIBT.

The PIBT has a 100 percent share in the relevant market and therefore, holds a dominant position.

In light of the findings, it is recommended that the commission may consider initiating proceedings against the PIBT under Section 30 of the Competition Act, CCP enquiry report added.

Copyright Business Recorder, 2020