Sasan UMPP: SC seeks Centre's reply on Tata Power plea challenging government decision allowing Reliance Power to divert surplus coal

The Supreme Court on Friday asked the Centre to file its response on Tata Power’s plea challenging the government decision that allowed Reliance Power (Rel Power) to divert surplus coal from the 3,960-mw Sasan power project in Madhya Pradesh. Tata Power has sought to restrain the government from allowing Rel Power to use the captive coal allocated to the Anil Ambani Group firm for any purpose other than generating electricity for the Sasan ultra mega power project (UMPP). A Bench headed by Justice G S Singhvi gave four weeks to the coal ministry, which was represented by Attorney General G E Vahanvati, to file an affidavit stating its objections to Tata Power’s stand.

TPC has challenged the Delhi High Court decision upholding a empowered group of minister’s (eGoM) decision to allow Rel Power to use excess coal from the captive mines meant for the Sasan project for other such projects being implemented by the company. According to the Tatas, the government cannot change the terms of the tender for a power project after awarding of the contract so as to confer enormous benefits on the successful bidder and the same “disturbed the fairness, transparency, and the level playing field”.

Senior counsel Harish Salve, appearing for Tata Power, said the company had locus to challenge the government’s decision as it had participated in the bid and had withdrawn only after Lanco-Globaleq consortium and RPL were held to be technically qualified.

“It had actively participated in the bidding process. But had later walk out of the tender...” he said, adding that RPL being its competitor in the power business had been given access to 9 million tonne of coal per annum, thus placing Tata Power in a disadvantageous position.

However, Vahanvati opposed Tata Power’s plea saying that the Tata company had suppressed material facts and all bidders including the petitioner were aware of surplus coal and the approval of the government was needed for its utilisation. He further said that TPC was informed through email.

The 4,000-mw mega project located at Sasan in Madhya Pradesh, has been dogged by controversies ever since public sector Power Finance Corporation invited bids in 2006. The project was awarded to a consortium of Lanco Infratech-Globeleq, but was scrapped eventually after allegations of financial mis-representation. Rel Power outbid NTPC and Jaypee Associates to win the project in the second bid in 2007. Tata Power, which was a party in the first bid, had stayed out the second time.

Sasan was allotted three coal mines (of total 750 as reserves at Moher, Chattrasal and Moher-Amlori Extension) on the condition that the coal produced from the block would be exclusively used for the project. A coal ministry panel had first noted that the Moher and Amlori blocks were big enough to support Sasan'’requirements. Later, it had approved the need for Chatrasal block for Sasan. The MP government in May 2008 had requested the central government to allow Rel Power to utilise excess coal from the coal blocks allotted for Sasan UMPP for another 4000 mw project.

Tata Power, which had participated in the earlier rounds of bidding for Sasan, had challenged the coal ministry’s decision giving in-principle approval to RPL to use surplus power in November 2008, citing the decision violated Sasan UMPP’s tender conditions.