NEW DELHI: The Attorney General (AG) has advised the government that if it wants to revoke the permission given to Reliance Power to divert surplus coal from mines attached to the Sasan power project, it will have to show that the company violated the terms under which it was allowed to use that coal for another project, government officials said.
The AG has also suggested that that the Empowered Group of Ministers (EGoM) acted within its rights when it allowed the company in 2008 to use surplus coal from the Rs 19,000 crore Sasan Ultra Mega Power Project (UMPP) for its Chitrangi project, said a coal ministry official, who did not want to be identified.
The AG’s view was sought by the Empowered Group of Ministers (EGoM) after the power minister recommended that surplus coal from the mines should not be diverted to another project. The power and coal ministries, however, may still seek cancellation of permission to Reliance Power to use surplus coal from three mines attached to the 4,000-mw UMPP in Madhya Pradesh to the Chitrangi project in the state.
The inter-ministerial panel, headed by Finance Minister Pranab Mukherjee, is scheduled to meet on Saturday to discuss the issue. In August 2008, the government allowed Reliance Power to use nine million tonnes excess coal from Moher and Moher Amlohri Extension and Chhatrasal blocks allotted to Sasan project to fire the Chitrangi plant.
It imposed several conditions: Building the Sasan project should be the company’s first priority; surplus coal should only be used to generate electricity, which should be sold at a tariff derived by competitive bidding; and the coal should be mined under the approved mining plan. The power ministry in December last year complained that Reliance Power had not signed power purchase agreement with Madhya Pradesh and not made any progress on the second project at Chitrangi.
The company has only signed a preliminary agreement with Madhya Pradesh for supply of a portion of power from Chitrangi at about Rs 2.45 per unit. The coal ministry has said the dispensation to Reliance Power should be revoked if the allocation conditions are not fulfilled.