August 27, 2007	Monday	Sha’aban 13, 1428

SPECIAL interests have succeeded in frustrating the official move to discourage restrictive trade practices and cartelisation by delaying the setting up of the proposed competition commission.

After about two years, the federal cabinet approved the conversion of Monopoly Control Authority (MCA) into the competition commission. President Pervez Musharraf was expected to promulgate an ordinance to create this new body. But now, like the issue of organ trade, the establishment of a commission will be decided by the parliament which could take a lot of time.

"This issue will go to the parliament after which the competition commission could be set up", said senior Joint Secretary of the Ministry of Finance, Mr Iqbal Hussain, who is handling the issue. When reminded that the cabinet had already approved it, why it cannot be promulgated through an ordinance, he said, "I have told you only the parliament will decide it".

Mr Hussain also said he could not give any timeframe as to when the parliament would adopt the competition commission bill. When contacted, Prime Minister's Advisor on Finance Dr Salman Shah said the government would soon decide whether the competition commission should be set up through an ordinance or through an act of parliament. Since the federal cabinet has already approved it, there should not be any unnecessary delay in it, Dr Shah said. "We would do it as quick as possible and may be this is decided in next two to three weeks' time".

Insiders agree that the competition commission had been delayed at the behest of powerful cartels’ lobby over which the World Bank has expressed its serious concern. The bank did not know why the government was delaying the issue.

The bank has promised to initially offer $10 million for the setting up of the commission. “The bank officials are surprised over the delay in the conversion of MCA into a competition commission", an insider said.

But the MCA Chairman Khalid Mirza is confident that the new body would soon be set up as it had already been approved by the federal cabinet.

As soon as the issue is decided either through an ordinance or an act of parliament, he said he would start implementing the relevant rules for ensuring competitive business practices.

He admitted that there had been a delay in converting MCA into a competition commission.

"In fact I am already working as to what kind of an organisational design for the commission is required", he said, adding that” there will be a broader scope of action to put in place an healthy and competitive environment.”

The proposed commission will look into illegal cartels and various restrictive trade practices through public advocacy and hearing.

The MCA chairman is watching all businesses and is in touch with the market. "My job will be to ensure the growth of the industry but it will have to conduct itself in a non-manipulative manner".

While the business needs to grow, he would “very much like to protect the public interest..

Earlier, there were reports that the government had shelved its own proposal of creating a competition commission.

The competition laws have been prepared with the help of the technical and legal assistance of the World Bank. Some people in the ministry of finance said various kinds of departmental hurdles were yet to be removed to set up the commission for broadening its scope including merger of the companies.

The World Bank is said to have asked the government to firm up an action plan to be supported by donors for MCA restructuring.

The bank and the Department for International Development (DFID) of England are providing necessary financial support.

Sources said that the WB had asked the concerned officials to expedite the issue, failing which, the bank and DFID could revise their decision to offer any funding for the proposed commission.

The World Bank officials believe that proven or suspected cartels have existed and many still may be prevailing in cement, sugar, ghee, autos, fertiliser and perhaps other industries which need to be investigated. There is a need to conduct a thorough inquiry as to what types of anti-competitive conduct are most prevalent.

The MCA has so far investigated 103 cases of monopoly that includes such sections as cars, batteries, tobacco, electrical, gases and chemicals. Of course this enquiry by itself provides no indication of abuse of monopoly position. At the very least, however, it suggests a wide field for enquiry.