The Competition Commission of India (CCI) has dismissed allegations of bid rigging, abuse of dominant position, and anti-competitive conduct in a case involving Adani Group entities, Azure Power, and the Solar Energy Corporation of India (SECI).

The case stemmed from a complaint alleging that SECI’s 2019 tender to set up 7 GW of solar power capacity, linked to 2 GW of annual solar manufacturing capacity, was designed to favor large players.

Background

The tender was designed to promote domestic manufacturing by tying project awards to commitments for setting up manufacturing facilities.

Following a competitive bidding process, Adani Green Energy and Azure Power emerged as the successful bidders, with Adani securing capacity linked to 2 GW of manufacturing and 8 GW of solar projects, and Azure securing 1 GW of manufacturing capacity and 4 GW of solar projects.

The complainant alleged that the tender conditions were structured to favor large developers and restrict participation by smaller players. It was claimed that provisions such as the greenshoe option enabled disproportionate allocation of additional capacity to successful bidders.

The complaint also cited Azure Power’s eventual surrender of project capacity and the subsequent transfer of a significant portion of that capacity to Adani Group entities as evidence of a premeditated arrangement.

Additionally, it was alleged that Adani Group leveraged its scale, financial strength, and vertical integration to foreclose competition, and that the overall process was influenced by collusion and anti-competitive conduct. The complainant also cited allegations in a U.S. indictment to support claims of misconduct.

SECI maintained that it had acted strictly in accordance with government guidelines and followed a transparent tariff-based competitive bidding process. It stated that tariffs were discovered through an e-reverse auction mechanism and that all project awards, power purchase agreements, and power sale agreements were executed in line with regulatory approvals.

SECI emphasized that the tender conditions were aligned with policy objectives, particularly the promotion of domestic manufacturing, and argued that the complainant had failed to substantiate any claims of collusion or anti-competitive agreements.

Commission’s Analysis

The Competition Commission held that the design of tender conditions falls within the prerogative of the procuring entity and does not, in itself, constitute anti-competitive conduct.

It observed that the complainant had not provided any evidence demonstrating that the tender conditions were structured to exclude competition or to ensure participation by only select players.

The Commission rejected the claim that the Adani Group held a dominant position in the relevant market. It noted that India’s power generation sector comprises multiple sources, including thermal, solar, wind, and hydro, with several significant public and private players operating.

The presence of major companies such as NTPC, Tata Power, JSW Energy, and others indicated that no single entity, including the Adani Group, could be considered dominant in the overall power generation market or even within the renewable energy segment.

It also found no evidence to support allegations of abuse of dominance. It observed that advantages arising from economies of scale, group synergies, or access to capital do not, by themselves, constitute anti-competitive behavior. The complainant’s claims regarding market foreclosure, discriminatory practices, and entry barriers lacked sufficient evidence.

Regarding allegations of bribery and misconduct arising from foreign proceedings, the CCI clarified that such issues, even if true, do not automatically constitute an abuse of dominance under competition law.

The Commission also addressed concerns regarding specific features of the tender. It found that linking solar manufacturing capacity with project awards was consistent with government policy and not prohibited under existing guidelines.

The inclusion of the greenshoe option was based on directions from the Ministry of New and Renewable Energy and had previously been upheld by the Central Electricity Regulatory Commission.

The Commission noted that any post-bid tariff reductions by developers were voluntary and beneficial to consumers, and therefore did not violate regulatory norms.

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