The firm had challenged diversion of coal from captive mines.
The Delhi High Court today dismissed a petition by Tata Power Company challenging the use 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 had no locus standi to file the petition and it was not maintainable, said the court. The petition suffered from delays and hence did not warrant the court exercising its power, said a Division Bench comprising Justice Madan B Lokur and Justice Siddharth Mridul.
“The court decision vindicates our stand on the matter and that of the government,” said JP Chalasani, chief executive of Reliance Power.
“The company followed the due process for getting approval from the government of India for use of incremental coal from coal mines allotted to the Sasan ultra mega power project. Now, the decision taken by the government has got judicial ratification,” said an official statement from Reliance Power.
Tata Power said it strongly believed that it had raised an important issue concerning the government of India’s decision to permit the diversion of coal from the captive mines allotted exclusively to the Sasan UMPP to other projects of Reliance Power after the conclusion of the bidding process.
“We will be filing an appeal before the Supreme Court, as we strongly believe that the issue has larger national ramifications,” said Tata Power.
In August last year, an empowered group of ministers (EGoM) had approved Reliance Power’s request to allow use of coal reserves from Sasan for other projects. Reliance Power plans to set up a 4,000 Mw project at Chitrangi in Madhya Pradesh, using 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, saying it violated the Sasan UMPP’s tender conditions and any excess coal should be handed over to the government-controlled Coal India Ltd, as this would benefit the state exchequer.
The government of India, another defendant in the case, and Reliance Power contended that the court should not entertain the petition as Tata Power had withdrawn from the bidding process for Sasan. Tata Power had suppressed material facts and all bidders, including Tata Power, were aware of the surplus coal and the provisions for its use, said the government.
While Tata Power’s shares rose 2.5 per cent on the Bombay Stock Exchange today to close at Rs 906.30 per share, Reliance Power rose 2.70 per cent to close at Rs 123.40.
“Tata Power’s record of subverting facts to mask its own failures is now well known. All through this process, it continued to lie to the public and to the judiciary with the sole purpose of thwarting the speedy implementation of the Sasan ultra mega power project,” said the Reliance Power statement.
“We believe we have not suppressed any facts or provided any incorrect information,” said Tata Power.
The captive coal mines of Sasan are estimated to have coal reserves of about one billion tonnes.
A Tata Power executive had earlier told Business Standard that the EGoM decision would allow Reliance Power to save about Rs 960 crore in an year, as captive coal mines give cost savings of up to Rs 240 crore a year for every 1,000 Mw 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 (public-private) model being adopted for the country’s infrastructure development,” said a Tata Power statement.
Reliance Power had signed a memorandum of understanding (MoU) with the 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, are in advanced stages. The company has already tied up for 1,241 Mw supply to Madhya Pradesh Power Trading Company at a rate higher than the price being offered by the Sasan UMPP, said sources with Reliance Power.
