KESC acquisition case not referred to CCP

Chairman, Competitive Commission of Pakistan (CCP), Khalid A Mirza has said that Karachi Electric Supply Company (KESC) acquisition case was not referred to CCP for its clearance and go ahead signal. He was replying to a question during a meeting with Site Association of Industry (SAI) on Monday regarding KESC that has increased the service cost due to wilful default from the agreements to invest and fill the generation gap causing pressure on demand of electricity resulting into load shedding.
He said that as per law, case of changing management of KESC in 2008 was to be referred to CCP for its clearance. He assured that on his return to Islamabad he would examine the case and take action, if ambiguity is found. He said that CCP was established on 2nd October 2007 under the Competition Ordinance, 2007. Major aim of this Ordinance is to provide a legal framework to create a business environment based on healthy competition towards improving economic efficiency, developing competitiveness and protecting consumers from anti-competitive practices.
The law seeks to prohibit abuse of market dominance, certain types of anti-competitive agreements, deceptive market practices, and mergers of undertakings that substantially reduce competition. This is combined with major emphasis on advocacy role of the Commission to promote voluntary compliance and to give a competition face to micro and macro-economic policies.
In line with modern competition regimes, the law adopts a carrot and stick; approach - the law provides for higher fines combined with imprisonment for non-compliance. On the other hand, the carrot is sweetened with sophisticated leniency provisions that may eventually lead to no fines and imprisonment, subject to certain conditions. To maintain high standard of evidence for unearthing secret cartels, the Competition Commission has legal powers to conduct searches and inspections.
Khalid Mirza apprised the participants that the law provides the jurisdictions for providing relief to the agitation against any service, which are not based on fair competition.
He said that the representation by the agreed parties structured in the proper formation is the key to earlier decision making by the CCP. Mirza while replying another question said that CCP has power to issue policy notes to any government agency if they violated CCP laws. Replying yet another question about Pakistan Steel Mills produces prices, he said that Steel Mills is a government organisation and we can only give them a policy note.
Khalid Mirza while answering a question about monopoly of caustic soda manufactories advised the questioner to send him details so that action could be initiated after going through merit and demerit of the case. To a question about tariff fixing of gas and power, he said that Ogra and Nepra are legally constituted bodes of the government to determine tariffs. Chairman SAI, Engr. M.A. Jabbar said that the present law promulgated in 2007 is replacement of ages old law of Monopoly Act.
He added that the present law is transformation of the old law to cater the needs of second-generation reforms. He said that the Ordinance takes care of the need to enhance economic efficiency and objectives to balance the interest of producer and consumers.
He said that this law is very much relevant to the industrial economy of the country and by making knowledge based confrontation, industries of Pakistan can seek fair trade competition and level playing field which remained non-available due to either absence of policies or unawareness to the laws, such as Competition Commission Law.
Engr. Jabbar appreciated the legislative position of Section 10 of the Competition Commission Ordinance and said that this section of the competition law is most appropriate for protecting the genuine manufacturers known for their name and brands, standardised produce and quality production to compete fairly and deter the deceptive practices reducing the share of quality manufacturing.
Engr. Jabbar said that Section 3 of the Competition Ordinance 2007 on its proper and presentable use could secure interest of industrial consumers in matters often disputed with utilities specifically with KESC. He said that Section 3 is armed with provision of analogy of seeking proportionate reduction in fix charges from KESC against the load shedding hours. He also said that the awareness of law can provide knowledge and the understanding of the tracks of the law to role problems and issues for addressing to enhance the economic efficiency.
He said that law should provide advisory board for presence of stakeholders so that the use of the law and not the abuse of the law is assured, besides the operation of the law will also be fair through the consultative mechanism in which stakeholders have a due say in providing inputs.
He referred to the verbal desire of the government that private sector is engine of growth and shall be placed with role in all legislative positions so that they are made privy to the decisions affecting the working of private sector accordingly. Members of the Commission Ms Rahat Kaunan Hassan and Ms Maleeha Mimi Bangash gave presentation of merger clearances and office of fair-trading.