HC pulls up Centre for capping coal mine for Sasan Power Ltd

The Delhi High Court today pulled up the Centre for its decision to cap the mining of coal at 17 MTPA from two mines by Sasan Power Ltd, a Reliance Power subsidiary, to run their 3,960 megawatt power project in Madhya Pradesh.
A bench of Acting Chief Justice Gita Mittal and Justice C Hari Shankar asked why the government was "so tight fitted" about its decision of not allowing the power company to mine more coal and suggested an out-of-court settlement.
"They are using coal for public use. There are no complaints of black marketing or stealing. Regulation and control is fine, but the government should think over it," the bench said.

"Get this matter out of court and have a look at it. These are areas where the court should not look into and no adjudication is required," the bench observed.
It directed the Centre-appointed committee, which is considering the issue, to take a decision expeditiously.
The company, represented by senior advocate P Chidambaram, contended that the committee be directed to arrive at a decision soon as it would run out of coal to operate the plant.

He also urged the court to allow them to extract extra coal to run the plant in the event if it runs out of the mineral, while the committee deliberates on its plea.

To this, central government standing counsel Sanjeev Narula said the company has already been allowed to mine one million tonne per annum (MTPA) extra.
The bench, which refrained from passing any order, directed the Centre to file an affidavit by March 13 explaining their stand.
The company, in its application, has contended that the mining of 17 MTPA of coal allowed from its two blocks Moher and Moher-Amlohri in Madhya Pradesh was not enough to carry out operations till the end of this financial year.
Sasan Power has claimed that if it was not allowed to mine another two MTPA, that is up to 19 MTPA, in this financial year, it will not be able to meet the requirements of its Sasan Ultra Mega Power Project (UMPP) that supplies electricity to 14 discoms in seven states including Delhi.

It has contended that in such a situation, the threat of a shutdown was looming large over the operation of the power project.
It has claimed that the approved quantity of coal would not meet the requirement for running the plant for the last 10 days of March this year, severely affecting 42 crore consumers.
Such a situation will also entail a loss of around Rs 130 crore for the company, while the discoms would have to shell out more than Rs 200 crore to purchase power from other sellers, it has claimed.
The company has said that it supplied electricity under a 25-year-long term power purchase agreement on a tariff of Rs 1.196 per kWh to 14 discoms across the states of Delhi, Haryana, Madhya Pradesh, Punjab, Rajasthan, Uttar Pradesh and Uttarakhand.

In its application seeking permission to mine 19 MTPA, Sasan has contended that this would also help it to maintain additional stock of coal of 1.25 million tonne for meeting any exigency which might disrupt coal production.
The application was filed in the main writ petition by Reliance Power and Sasan challenging the Centre's May 7, 2015, decision to cancel one of the three coal blocks allocated to Sasan UMPP.
The government had justified the cancellation, saying the unit's coal requirement could be met by the other two mines, Moher and Moher-Amlohri extension.
Sasan is an integrated power plant-cum-coal mining project at a single location, involving an investment of over Rs 27,000 crore, Reliance has said in its petition.