‘Not misusing Sasan coal block’, R-Power tells CAG

19 May 2012

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Reliance Power Ltd, part of the Anil Dhirubhai Ambani Group, has asked the Comptroller & Auditor General of India to annul its observations of "undue benefit" gained by R-Power by diverting surplus coal from its Sasan project in Madhya Pradesh for the nearby Chitrangi power project.

The company said the government is in the process of making a policy decision to allow such diversion.

The CAG's final report is expected to be tabled in Parliament during the current session.

''In view of the action taken by the power ministry to review Sasan coal permission at the highest levels of the government as recommended by CAG and the decision of the EGoM (empowered group of ministers) that the surplus coal permission for Tilaiya would be governed by a comprehensive policy, we would request you to kindly consider dropping the para on undue benefits,'' R-Power said in a recent letter to the CAG which has just come to light.

The CAG's draft report on coal allocation has alleged undue benefits to the tune of Rs15,849 crore gained from the government by R-Power through surplus coal allocation for two of its ultra-mega power projects (UMPPs). The report pegged the benefit to R-Power from surplus allocation for Sasan UMPP at Rs 4,875 crore. Another Rs 10,974 crore ''may accrue'' from the Tilaiya UMPP, it said.

The EGoM is believed to have decided that permission for use of surplus coal from Tilaiya UMPP would be governed by a new policy on excess coal usage. The policy would be formulated by the coal ministry.

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