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An Inter Ministerial Group (IMG) has directed the Coal Ministry to refund ₹208.16-crore bank guarantee to Reliance Power without any deduction.
The bank guarantee was forfeited by R Power after it failed to initiate coal production from the Kerandari B&C coal block allocated in 2007.
The IMG also pinned the responsibility for not starting coal production from the mine on Jharkhand Urja Vikash Nigam Ltd (JUVNL).
According to the minutes of the meeting of the 40th IMG meeting, “As per the terms of PPA (Power Purchase Agreement), JUVNL — the lead procurer, was responsible for land acquisition for coal mine & fuel transport system and site clearance from the Ministry of Environment and Forest in respect of Kerandari B&C coal block.
The procurers could not fulfil the obligations mentioned in the PPA even till the time of notice of termination of PPA dated April 28, 2015.”
The IMG concluded, “No delay is attributable to RPL for failure to achieve milestones…BG (Bank Guarantee) amounting to ₹208.16 crore submitted by RPL may be released without any deduction.”
The IMG comprised representatives from the Ministry of Coal, Coal Controller’s Organisation, Ministry of Steel, Ministry of Law, Central Mine Planning and Design Institute, Power Finance Corporation, Central Electricity Authority and Coal India Ltd.
The Kerandari B & C coal block was allocated to Jharkhand Integrated Power Ltd. (JIPL), a subsidiary of Power Finance Corporation (PFC), in 2007. Reliance Power acquired JIPL from PFC on August 7, 2009 after emerging as the lowest bidder in the international competitive bidding process for the Tilaiya Ultra Mega Power Project.
On May 1, 2015, RPL relinquished Tiliaya UMPP as the procurers failed to fulfil principal development period obligations under conditions of PPA even after the lapse of five-and-a half-years of handing over of JIPL (a Special Purpose Vehicle created by PFC for the development of Tiliaya UMPP) to RPL.
RPL had then requested the Ministry of Coal to refund the bank guarantee (BG) submitted by it for the Kerandari B & C coal block.
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