Undue benefit to Reliance Power on coal allocation

August 17th, 2012 - 6:05 pm ICT by IANS  

New Delhi, August 17 (IANS) The permission to Reliance Power to use excess coal from three blocks allocated to Sasan Ultra Mega Power Project resulted in an undue benefit to the company, India’s official auditor said in a report Friday.

The report also said to ensure fair play, a level playfield and transparency of bidding process for future developers, the allocation of the third coal block at Chhatrasal in Madhya Pradesh be appropriately reviewed.

The Comptroller and Auditor General (CAG) report on Ultra Mega Power Projects for the year ended March 31, 2012, was tabled in parliament Friday.

The coal ministry had permitted Reliance Power to utilize surplus coal from three mines of Sasan project for their another project in Madhya Pradesh, which as per the audit report vitiated the bidding process.

“Audit has estimated the financial benefit that will accrue to the project developer on the basis of comparison of tariff of the Sasan project (Rs.1.196 per unit) with that of Chitrangi (Rs.2.450 per unit for Madhya Pradesh and Rs.3.702 per unit for Uttar Pradesh),” the report says.

“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.”

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