CAG report on power tabled, Reliance Power reacts

New Delhi: Reliance Power on Friday reacted to the CAG report on UMPPs or Ultra Mega Power Projects that said that the company had benefited in the Sasan Ultra Mega Power Project, the country's first domestic, coal-based project.

"CAG's observations don't factor in the looming coal crunch," it said, adding that it got surplus coal only via use of advance technology and that the Empowered Group of Ministers (EGoM) ratified allocation of coal blocks to the company.

"The decision to permit use of surplus coal from Sasan UMPP Coal Blocks for power generation has been ratified by EGOM on two occasions (once in 2008 and again in 2012). CAG's recommendation of reviewing allocation of coal blocks of Sasan UMPP has already been implemented by Government of India," it said.

It added, "The coal mines allotted to UMPPs are the only coal blocks allotted through tariff based competitive bidding process so far in India.

"Reliance Power had no role in allotment of coal reserves to Sasan UMPP. Coal blocks were allotted months before bid submission in December 2006."

The CAG report on Ultra Mega Power Projects (UMPP) on Friday said that the permission for use of excess coal by Reliance Power from the three blocks allocated to Sasan UMPP after its award, not only violated the bidding process but also benefited Reliance Power and Tata.

Reliance had reportedly said that since it would be able to use 20 million tonnes from the two blocks, there would be sufficient coal for the Sasan UMPP.

"Audit has estimated the financial benefit that will accrue to the project developer on the basis of comparison of tariff of Sasan project with that of Chitrangi (the third coal block). The overall financial benefit to Reliance Power due to impact of difference in tariff works out Rs 29,033 crore with a net present value of Rs 11,852 crore," the report said.

The report further said that the allocation of the third coal block - Chhatrasal - must be checked to ensure fair play.

Sasan UMPP was the first domestic, coal-based ultra mega power project.