A Delhi based social activist has dragged APM Terminals (APMT), part of global shipping giant AP Moller Maersk Group, Netherlands, to the Competition Commission of India (CCI) for alleged abuse of dominance.
The petition, heard by CCI on August 24, accuses APMT of diverting container traffic from a terminal it manages (through Gateway Terminal of India Pvt. Ltd. (GTIPL) in which it has majority stake) in Jawaharlal Nehru Port Trust (JNPT), Mumbai to another one in Gujarat, also managed by the group through Gujarat Pipavav Port limited (GPPL).
According to complainant Subodh Kumar Sharma, APMT is adopting unfair and discriminatory pricing and using its dominant position in one relevant market to enter into, or protect, other relevant market and hence violates India's competition law.
GTIPL handles about 45 per cent of the container traffic in JNPT, the country's biggest port in terms of container movement. Rest of the traffic is shared between two other terminals - one operated by the port authority itself and the other by a private entity, Nhava Sheva International Container Terminal Pvt Ltd. (NSICT), a subsidiary of Dubai World.
The petition states that GPPL needs to ensure minimum container traffic to its Gujarat terminal to avoid paying penalty to the Indian Railways by virtue of a clause agreed upon by GPPL and Indian Railways - when they formed a 50:50 joint venture Pipavav Railway Corporation Ltd. (PRCL) to construct broad gauge railway connectivity from the terminal to the hinterland (Surendra Nagar junction) to facilitate seamless container movement to the port. According to the 30 year concession agreement signed by PRCL and the Ministry of Railways, the managing party at GPPL (APMT) would incur penalty obligation if it does not ensure basic minimum traffic from the GPPL.
The complainant alleges that GPPL and its managing parent APMT are misusing its dominant position in JNPT to ensure good inland container traffic at Pipavav port.
GTIPL is a joint venture between APMT and public sector entity Container Corporation of India (CONCOR) with APMT holding 76 percent stake. The complainant alleges that the revenue sharing agreement that exists with APMT and CONCOR, and the tariff restrictions that is applicable in a major port like JNPT are also reasons for APMT to route traffic to the minor port it operates in Pipavav, as the tariff regulation by Tariff Authority for Major Ports (TAMP) is not applicable there.
CCI has heard both the parties and an order is awaited.
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