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Reliance Power’s Sasan UMPP doesn’t require Chhatrasal coal block: govt

The government on Monday justified cancellation of one of three coal blocks allocated to Reliance Power Ltd’s Sasan Ultra Mega Power Project (UMPP), saying the unit’s coal requirement could be met by the other two.

Defending its decision, the coal ministry told Delhi high court that Reliance had on several occasions represented that its Sasan unit required only 16 million tonnes per annum (MTPA) of coal which could be easily met by the Moher and Moher-Amlohri extension coal blocks in Madhya Pradesh.

The submissions were made before a bench of chief justice G Rohini and justice Jayant Nath in an affidavit filed through additional solicitor general (ASG) Sanjay Jain and central government standing counsel Sanjeev Narula.

The ministry has said that since the two blocks could meet the requirements of the project, the third block - Chhatrasal - was deallocated. It said the company also did not fulfill the allocation condition of developing the Chhatrasal block, in Madhya Pradesh, and commencing coal production from there.

The affidavit was filed in response to Reliance Power’s plea challenging the government’s 7 May decision to cancel allocation of Chhatrasal coal block, which was allocated for Sasan UMPP.

The court fixed the matter for further hearing on 5 next year. “Petitioner herein, by raising superfluous grounds, are trying to avoid their contractual liability to supply power at their bid rate for entire contract period and therefore, the petition is liable to be dismissed,” the coal ministry contended in its response.

It said that after RPower emerged as the successful bidder, it wanted to use the surplus coal from Chhatrasal for its other projects, which could not be allowed as the Supreme Court had directed that coal blocks allocated for UMPPs would be used for UMPPs only and no diversion of coal for commercial exploitation would be permitted.

RPower had argued before the high court that the apex court had “specifically excluded” UMPPs while deallocating 214 coal blocks by its orders of August and September last year.

source: http://www.livemint.com