CAG seeks power ministry reply on RPower's surplus coal use

The Comptroller and Auditor General of India (CAG) has sought the Power Ministry's reply on the issue of allowing Reliance Power to divert excess coal from its 4,000 MW Sasan project in Madhya Pradesh to its other project in the state.

"We have received CAG comments. We are examining them and we would reply to them soon," Power Secretary P Uma Shankar said.

While he refused to elaborate, sources said CAG had sent queries on Reliance Power diverting surplus coal from mines attached to Sasan project to its another project -- Chitrangi in Madhya Pradesh.

A Reliance Power spokesperson, however, said that the decision of the Empowered Group of Ministers (EGOM) to permit use of incremental coal does not result in any loss to the exchequer nor it confers any undue benefit to the company.

In a statement, the spokesperson further said that no commercial condition was changed subsequent to the award of projects to Reliance Power.

The company is executing the 4,000 MW Sasan Ultra Mega Power Project (UMPP) in Madhya Pradesh and is also developing a project in the nearby Chitrangi district. The EGoM in August, 2008 had allowed diversion of surplus coal from Sasan blocks to the Chitrangi project.

Reliance Power is also executing two more UMPPs, at Krishnapatnam in Andhra Pradesh and Tilaiya in Jharkhand.

The company said that "the Ministry of Power has confirmed that there is no CAG report on the EGOM decision regarding use of incremental coal from coal blocks allotted to Reliance Power's UMPP.

"The Ministry of Power has further clarified that only certain queries have been raised, which are being examined and will be answered by them."