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R-Power refutes claims

BS Reporter/Mumbai 18 Aug 12 | 12:23 AM
Related to : Reliance Power Ltd
 Reliance Power Ltd
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Refuting the claims that it has received undue benefit of Rs 29,033 crore when the government allowed the use of surplus coal from blocks allotted to the Sasan power plant in Madhya Pradesh, Reliance Power Ltd today slammed the Comptroller and Auditor General, saying the company had no role to play in the allotment and there was no diversion of coal from the blocks meant for the Sasan project.

CAG in its report tabled in Parliament on Friday said that subsequent to the award of the 4,000-Mw Sasan ultra mega power project (UMPP) to R-Power, the government granted permission to the Anil Ambani-led company to utilise the surplus coal from three mines attached to the project for the group's Chitrangi project in Madhya Pradesh.

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“The CAG calculations are erroneous and there is no undue benefit to R-Power as the power from surplus coal is being sold on tariff-based competitive bidding basis," J P Chalasani, chief executive officer of R-Power, told reports over a conference call.

"Coal blocks were allocated for Sasan even before the bidding process (started)," Chalasani added, saying the empowered group of ministers had also ratified the decision in 2008 and again in 2012.

R-Power also said comparison between Sasan and Chitrangi tariff to quantify benefits is misleading. "No two projects can ever have the same tariff even if the coal source is the same and even if the project is coming in the same location. Power tariffs vary based on risk profile and various other project-specific parameters. Besides, timeline of the execution of these two projects is entirely different," said Chalasani.

Questioning CAG’s observation, R-Power said between January and March 2012, it brought out inconsistencies in its computation. The company also made three presentations to senior CAG officials. “However, we have neither received the basis used to calculate undue benefit nor have our representations been fully considered," noted Chalasani.

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