The Delhi High court today dismissed a petition filed by Tata Power Company (TPC) challenging usage of surplus coal from the captive coal mines of Sasan ultra mega power project (UMPP) for other projects of Anil Ambani controlled Reliance Power. Tata Power said the company would appeal the decision in the Supreme Court.
Tata Power has no locus standi to file petition and hence it is not maintainable, said a division Bench comprising Justice Madan B Lokur and Justice Siddharth Mridul.
"The Delhi High Court decision gives judicial approval for EGOM decision and the judgment paves the way for Reliance Power to expedite the 4000 mega watt Chitrangi project," said a Reliance Power executive.
In August last year, an empowered group of ministers (EGOM) had approved Reliance Power’s request to allow utilization of coal reserves from Sasan for projects other than the ultra mega project.
Reliance Power's plans to set up a 4000 MW project at Chitrangi in Madhya Pradesh, utilizing the excess coal from Sasan.
Tata Power, which had participated in the earlier rounds of bidding for Sasan, challenged the decision in the Delhi High Court in January this year, citing the decision violated Sasan UMPP’s tender conditions.
“Tata Power strongly believes that it has raised an important issue concerning the Government of India’s decision to permit the diversion of coal from captive mines allotted exclusively to Sasan UMPP to other projects of Reliance Power, after the conclusion of the bidding process. We would be filing an appeal before the Supreme Court as we strongly believe that the issue has larger national ramifications,” said Tata Power.
Tata Power contended that any excess coal should be handed over to Government controlled Coal India Limited, as it could benefit the state exchequer.
The captive coal mines of Sasan are estimated to have coal reserves of about one billion tonnes.
A Tata Power executive had told Business Standard that the EGOM decision would allow Reliance Power to save about Rs960 crore in an year as captive coal mines give cost savings of upto Rs240 crore a year for every 1000 mega watt capacity.
"This has disturbed the fairness, transparency and the level playing field, and is not in accordance with the bidding documents. The issue assumes further significance in view of the PPP model being adopted for the country’s infrastructural development," said a Tata Power spokesperson.
The Ministry of Power, another defendant in the case, countered the petition saying Tata Power had suppressed material facts and all bidders including Tata Power were aware of surplus coal and the provisions for its utilization. Tata Power has no legal right to file the petition since it withdrew from Sasan UMPP’s tender process, the Government counsel said.
"We believe that we have not suppressed any facts or provided any incorrect information," said Tata Power.
Reliance Power had signed an Memorandum of Understanding (MOU) with Madhya Pradesh Government in September 2007 to establish the project and has applied for land for the project. Major clearances for the project including environmental clearance are in advanced stages. The company has already tied up 1241 MW net power supply with Madhya Pradesh Power Trading Company at a rate higher than the rate being offered by Sasan UMPP, said sources with Reliance Power.
