Freight rate hike triggers demand for Compat intervention

Terming freight rigging by All India Motor Transport Congress (AIMTC), country's largest truckers body, as a "habitual offence", the Indian Foundation for Transport Research and Training (IFTRT), an advocacy group, now plans to knock on the door of the Competition Appellate Tribunal (Compat) for a stay on the 15% increase in freight charges imposed by AIMTC in mid-September after diesel prices were raised by R5.62 per litre.

This comes despite the Competition Commission of India (CCI) ordering an investigation last month on the plea of IFTRT. In its plea, IFTRT wanted CCI to take stern action against AIMTC for announcing 15% hike in freight rates on September 14 despite an earlier Monopolies and Restrictive Trade Practices Commission (MRTPC) order asking it against doing so.

Now the director general investigation in CCI is examining the freight rigging by AIMTC, but it has not passed an interim order staying the freight rate hike. "We are inclined to go to the Compat. We are seeking legal advice. It is within our right to appeal to the tribunal since CCI did not stay the hike in freight rates," said SP Singh, senior fellow and coordinator, IFTRT.

According to IFTRT, as AIMTC claims to be the apex body of road transporters, controlling 80 lakh trucks in the country, it has indulged in similar actions (hiking freight rates) in November 1999 (when freight went up 18%), June 2008 (when freight went up 15%) and September 2012 (when freight went up 15% again).

When asked why IFTRT will not wait for CCI investigations, Singh said it was their right to appeal since there is already a previous order by the MRTPC in 2006 against AIMTC on the same issue. Singh said CCI should have been prompt in providing interim relief by staying the freight hike. "Our intent will be to bring the matter before the Compat. We will, of course, be helping CCI investigations," Singh said. 

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