RPower asks CAG to drop charges of 'undue benefit'

Reliance Power has asked the Comptroller and Auditor General (CAG) to drop its observations of "undue benefit" in a draft audit report after the government recently gave it a clean chit over transferring surplus coal fromSasan project in Madhya Pradesh to another power plant.

The letter written by R Power to CAG last week said, "In view of the action taken by the power ministry to review Sasan coal permission at the highest levels of the government as recommended by CAG and the decision of the EGoM (empowered group of ministers) that the surplus coal permission for Tilaiya would be governed by a comprehensive policy, we would request you to kindly consider dropping the para on undue benefits."

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An empowered group of ministers (eGoM) had taken the decision in August 2008 that R Power could use surplus coal from captive mines allotted for its Sasan ultra mega power plant (UMPP) to Chitrangi project in the same state. The ministers had also granted it the permission to use surplus coal from the Tilaiya UMPP, which was also awarded to R-Power.

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CAG had reviewed that decision to see if it violated the contract signed by R Power and said in October 2011 that this was a violation of guidelines for which R Power had made "undue benefit" of Rs 1.2 lakh crore. CAG later brought down the "benefit" amount t0 Rs 15,849 crore.

Business Standard reports, "Asked whether the decision would set a precedence and be used by the government for allowing surplus coal diversion in all similar cases going forward, Khurshid had said a comprehensive policy on surplus coal would be finalised soon, based on AG's recommendations, to avoid ambiguity in future."