RPower wants CAG to delete adverse remarks

NEW DELHI, May 20, 2012

Anil Ambani owned Reliance Power has urged the Comptroller and Auditor General of India (CAG) to delete the "observations" it had made in its draft report about the diversion and utilisation of excess coal from the Sasan and Tilaiya ultra mega power projects in Madhya Pradesh and Jharkhand.



In a letter to CAG Vinod Rai, Reliance Power has stated that in view of the decision taken by the Empowered Group of Ministers (EGoM) not to review its earlier decision allowing Reliance Power to use excess coal from the 4000 MW Sasan UMPP mines for its another project, it was important that such adverse observations about Reliance Power should be removed.



Asserting that the Coal Ministry would come out with a policy on use of excess coal from such mines, the EGoM headed by Finance Minister Pranab Mukerhjee is understood to have decided that any permission for usage of such coal would be governed by the new policy. "It is therefore requested that CAG consider dropping the audit para on undue benefits arising out of surplus coal from Sasan UMPP and Tilaiya UMPP," it states. The CAG had made the observations in its draft of the report "Working of SPVs in PFC."



Sources said the draft CAG report had stated that the decision to permit usage of surplus coal gave undue benefit to Reliance Power. The EGoM at its meeting on April 28 had decided not to review the past decision after taking legal opinion from the Attorney General G.E. Vahanvati. "Since the due process has been followed and CAG observations have now been fully acted up after deliberations and review at the highest levels in the government, it is requested that the audit observations pertaining to Sasan UMPP be dropped," the letter said.



Reliance Power said that as per reported EGoM decision, the permission for surplus coal usage from Tilaiya UMPP would be as per the new policy and hence it may not be appropriate to quantify losses or make observations on Tilaiya UMPP. Reliance Power has bagged three UMPPs — Sasan (Madhya Pradesh), Tilaiya (Jharkhand) and Krishnapatnam (Andhra Pradesh).
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