Diversion of extra coal by UMPPs to be scrapped

With CAG breathing down their necks,power and coal ministries have agreed that a blanket relief to ultra mega power projects to divert excess coal to other power plants be scrapped,starting with Reliance Power Ltds Tilaiya UMPP

With CAG breathing down their necks,power and coal ministries have agreed that a blanket relief to ultra mega power projects to divert excess coal to other power plants be scrapped,starting with Reliance Power Ltds (RPL) Tilaiya UMPP.

The Ministry of Power is of the view that incremental coal from Tilaiya UMPP should not be permitted to be used in other projects of RPL, says the draft note for the Empowered Group of Ministers.

The proposal says that the extra coal from Tilaiya UMPP be handed over to Coal India Ltd subsidiary at a price determined by the government for disbursal to power projects.

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The damage-control exercise comes in the wake of Comptroller and Auditor Generals review on Working of Special Purpose Vehicle in Power Finance Corp which alleges that the ministry gave undue benefit of Rs 1.20 lakh crore to RPL in the UMPPs at Sasan in Madhya Pradesh and Tilaiya in Jharkhand.

The Coal Ministry has said,There is a condition in the allocation letter that the surplus coal may be transferred to the nearest CIL subsidiary at a transfer price. It said that a January 2010 decision of the EGoM suggested that extra coal could be allowed for use by the UMPPs in their other plants only after a vetting by the Law Ministry.

The EGoM note does take a position on coal diversion from Sasan UMPP as it has been referred to the Coal Ministry for checks.

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