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Home News Power Sector News Tata Power approaches Delhi High Court for re-tendering Sasan UMPP

Tata Power approaches Delhi High Court for re-tendering Sasan UMPP

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Tata power flles case Tata Power has filed a writ petition in the Delhi High Court challenging the government’s decision to allow diversion of coal from the captive coal mines of the Sasan ultra mega power project (UMPP) to other power projects. An empowered group of ministers (eGoM) had allowed Reliance Infrastructure Ltd (Rinfra), the successful bidder of the Sasan UMPP, to use surplus coal from the Sasan block for another 4,000 mw power project at Chitrangi in Madhya Pradesh. Tata Power was the number two bidder for the Sasan power project.

In its petition, the company has sought the court’s direction to cancel the award of Sasan project to Rinfra and re-tender it with the permission to divert coal from captive coal blocks. It said that a prior knowledge to utilise excess coal from the captive mines could have impacted the tariff bid by competitors. While Rinfra's quoted tariff was Rs 1.19 per unit, the tariff quoted by Tata Power was Rs 1.41 per unit. The approval to divert coal from captive coal mines of Sasan to Rinfra for use in other projects is completely contrary to the express terms of the bid documents disclosed to all bidders in the bidding process, thereby changing tender conditions, Tata Power said in its petition.

As per existing regulations, captive coal mines are given to specific end-users. Any surplus coal generated from such blocks becomes a property of the central government which then disposes it through its PSU Coal India (CIL). In a few special cases, however, the coal ministry accords permission for sale of excess coal on a temporary basis.

Interestingly, the Prime Minister-led ministry of coal had allotted the three coal mines (of total 750 million tonnes reserves at Moher, Chattrasal and Moher-Amlori Extension) to Sasan UMPP on the condition that the coal produced from the block would be exclusively used for the project. Even the coal ministry had earlier informed the eGoM that coal allocation (captive blocks) for Sasan has been approved for exclusive use for the UMPP project. New avenues were identified after a request was made by the Madhya Pradesh government in a letter written to the Prime Minister.

In its petition, Tata Power has also drawn the court’s attention to the fact that after the permission (for diverting surplus coal), Rinfra would sell 1,241 mw to Madhya Pradesh at a tariff of Rs 1.19 per unit from Sasan and another 1,241 mw from Chitrangi at 2.45 per unit. Coal for both the projects would come from same blocks that were earlier earmarked only for Sasan. RPL will be free to dispose the balance power at any price to any person or licensee within or outside the state of Madhya Pradesh.

The move by Tata Power assumes importance as its decision would have a bearing on a large proportion of the 78,577 mw new generation capacity planned in the 11th Plan which would be fuelled by coal. If all tariff based projects are allowed to divert surplus coal from captive blocks, it could help companies in bringing down overall tariff.

Source - Economic Times

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