RPower asks CAG to drop observations on coal diversion

Our Bureau Updated - November 12, 2019 at 06:33 PM.

Reliance Power has asked the Comptroller and Auditor General to drop references on ‘undue benefits' to it on surplus coal diversions.

This relates to the captive coal blocks allocated to the Sasan UMPP (ultra mega power project) and Tilaiya project.

The first CAG audit report had pegged the monetary benefit derived by R Power through diversion of surplus coal at Rs 1.80 lakh crore. Subsequent audits scaled it down to about Rs 15,000 crore last year.

R Power contended that the EGoM (empowered group of ministers) had revalidated the approval for Sasan coal on April 28. Hence, CAG's recommendation that the incremental coal permission should be reviewed had been complied with.

As the Chitrangi project was still awaiting clearances it would be premature to quantify any benefits due to sale of power using the surplus coal from Sasan, it said. Further, Tilaiya coal blocks would be governed by a new comprehensive policy on usage of surplus coal. The company maintained that this does not offer any scope for CAG to include any ‘undue benefit' to Reliance Power from the captive blocks.

As the Tilaiya surplus coal permission will be in line with the new surplus coal policy, it was inappropriate to quantify losses to the Government on that count, R Power argued. The power tariff offered by the 4000 MW Sasan plant is Rs 1.19 a kwh and Tilaiya (also 4000 MW) Rs 1.77 a kwh.

IN COURT

Tata Power has filed a SLP (special leave petition) in Supreme Court challenging the coal diversion permitted to R Power.

After the EGoM accorded clearance to Sasan coal, Tata Power said it was sub judice as the case was in the Supreme Court.

Tata Power contended that the award of the contract and the post award changes in the terms/basis of the tenders invited had resulted in an arbitrary and discriminatory denial of a level-playing field to other bidders.

>murug@thehindu.co.in

Published on May 18, 2012 16:49