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• Original UMPP norms required that coal meant for use in the project could not be utilized for other plants owned by the developer.A panel of ministers will discuss on 23 February the issue of allowing Reliance Power Ltd to divert surplus coal from captive mines associated with its so-called ultra-mega power project (UMPP) in Sasan, Madhya Pradesh, to other plants owned by the company.

Reliance Group chairman Anil Ambani.

• This follows the Comptroller and Auditor General of India (CAG) questioning the decision by the empowered group of ministers (eGoM) to allow such diversion by the Anil Ambani-controlled Reliance Group firm—another blow against a government that’s been hit by a series of controversies regarding contracts and policies.“It is for the eGoM to take a decision on the issue. We had earlier floated a note for the eGoM’s consideration recommending the cancellation of the earlier decision,” said a top power ministry functionary, requesting anonymity.
• A senior power ministry official, who also didn’t want to be identified, confirmed the 23 February meeting, saying there was a great deal of “interest” in the issue.At the last eGoM meeting held in December, the panel had decided to refer the issue to attorney general Goolam E. Vahanvati for a legal opinion.“The legal opinion was sought from the attorney general in late January. His opinion is yet to be sent,” said a government official requesting anonymity.UMPPs, as power projects with a capacity of generating at least 4,000 megawatts (MW) are known, were conceived by the government to reduce India’s chronic power deficit. The projects were awarded to private sector firms through a competitive bidding process.
• Original UMPP norms required that coal meant for use in the project could not be utilized for other plants owned by the developer. The move to change this norm in the case of Reliance Power’s Sasan project was taken in August 2008 by the eGoM and the panel later decided to make this applicable to all UMPPs.“The report to be submitted to Parliament is in the advanced stages of completion,” said a CAG official requesting anonymity, referring to the examination of UMPPs by the auditor.The eGoM meeting is to be presided over by finance minister Pranab Mukherjee and will be attended by law minister Salman Khurshid, coal minister Shriprakash Jaiswal, power minister Sushilkumar Shinde and Planning Commission deputy chairman Montek Singh Ahluwalia.
• Mint reported on 28 September that CAG was looking into an earlier eGoM decision to allow Reliance Power to use coal meant for the Sasan project at Chitrangi, also located in Madhya Pradesh. Reliance Power is committed to selling power generated at Sasan at Rs. 1.19 a unit, while it plans to charge Rs. 2.45 a unit for power produced by its proposed 4,000MW plant in Chitrangi.A Reliance Power spokesperson said in an emailed response: “The permission for use of incremental coal for our projects was taken at the highest level in the government of India by the eGoM (equivalent to Cabinet). We are in full compliance with all the conditions stipulated by the eGoM and the ministry of coal for use of incremental coal. Accordingly, we are progressing with the development of coal mines and associated power projects.
• “The government of India, in its affidavit to the Supreme Court, has stated that ‘the decisions that have been taken by the government (permitting the use of incremental coal) are entirely in accordance with law and in overwhelming public interest’,” the spokesperson added.Tata Power Co. Ltd has appealed to the Supreme Court against the eGoM’s decision of 2008. Earlier, the Delhi high court had upheld the government’s decision.Reliance Power has sued HT Media Ltd, publisher of Mint, in the Bombay high court over a 12 May 2010 front-page story in Mint that it disputed. HT Media is contesting the case.

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