National Thermal Power Corporation(NTPC) was asked to surrender the Chhatrasal coal block to Reliance Infrastructure( Formerly Known as Reliance energy) on the premise that there was limited coal availability for the 3,960MW Sasan Ultra Mega Power Project in Madhya Pradesh- Wall street journal reported on 07-11-2008. With three blocks in its fold, the Sasan project’s total coal reserves now stand at 750 million tonnes. On 13 August this year, an empowered group of ministers allowed Reliance Power to use surplus coal from captive mines allocated for the Sasan project for other projects being developed by it or its affiliates. This means the company can use the coal for its 3,960MW plant project at Chitrangi, also in Madhya Pradesh.
The 4,000MW project in Madhya Pradesh had been earlier alloted two coal blocks-Moher and Moher-Amlori Extension in late 2006 in addition to the Chhatrasal block it took away from NTPC.
Reliance Power, controlled by Anil Ambani, has agreed to sell power generated at Sasan at Rs1.19 a unit, while it plans to sell power generated at Chitrangi at Rs2.45 a unit.
To be sure, NTPC was asked to give up the coal block before the project was awarded. Initially, the Sasan project was awarded to a consortium headed by Lanco Infratech Ltd. However, this group was subsequently disqualified for violating bidding norms and the project awarded to Reliance Power on the condition that it match Lanco’s bid.
According to documents prepared for the consideration of the ministerial group, while the power ministry had asked for an additional coal block in October 2006, the block was allocated in the same month to Power Finance Corp. Ltd-the nodal agency for the award of projects with installed capacity of at least 4,000MW.
The ministerial meeting of 13 August 2008 was the first one held after the 22 July trust vote the ruling United Progressive Alliance coalition at the Centre won, largely thanks to support from the Samajwadi Party, whose leader Amar Singh is considered to be close to Anil Ambani.
The 3960 MW project of Sasan Power Limited has been started in a nearby area of Sasan village which is under the Singrauli Tehsil of Sidhi district in Madhya Pradesh. Initially the project was under the control of Power Finance Corporation Limited. However, through a bidding procedure done on international levels, the project was bagged by the Reliance Power in the year 2007.
The site of the project covers around 3500 hectares of land. The Rihand Reservoir located at a distance of about 7 km from the Power Project is a major source of water supply. The Singrauli Coal fields have several integrated blocks that help in transportation of coal to the project site. Ruhella, Mohar, Bundela, Nigahi and Mehrauli blocks, all of which are about 25 km from Sasan Power Limited project, are supposed to supply the needed coal for the power generation.
Courtsey- Wallstreet Journal