Country’s official auditor Comptroller and Auditor General on Friday accused the environment ministry of extending "undue favours" to different corporate houses including Reliance Power while granting forest clearance.
In a report tabled in Parliament, the auditor said that the environment ministry exempted Reliance Power Limited in April 2009 for its Sasan Ultra Mega Power Project from providing non-forest land to the tune of 1,384 hectares in violation of the Forest (Conservation) Act.
The law provides that for each hectare of forest land diverted for a project equivalent area of non-forest land should be made available by the user agency to the Forest Department.
The exemption becomes available if the state certifies that no non-forest land is available in entire state. In the case of Reliance, the exemption was given on basis of Madhya Pradesh government certificate that no non-forest land was available in the district.
"The ministry did not exercise due diligence in ensuring compliance with conditions of the Forest Act," the CAG said.
In a response, a Reliance Power spokesperson said: "The observations of the CAG regarding exemption given to Sasan Power Limited from acquiring non-forest land for compensatory afforestation are misplaced and bereft of facts."
The company also stated that any cost incurred on acquiring non-forest land for compensatory afforestation would have increased that cost of the project which would had to be borne by the consumer as it would have resulted in increase in tariff.
"Therefore exempting Sasan from acquiring non-forest land for compensatory afforestation has in no way benefited or extended any 'undue favour' as alleged by CAG," the company in a written response.
The CAG also said similar generosity was shown towards JP Associate by Uttar Pradesh government in 2007 when forest-land was changed as revenue land for its cement plant without prior permission of the environment ministry.
It meant that the company was not required to acquire non-forest land for compensatory afforestation. The value of the land wrongfully diverted was Rs. 133 crore, the CAG said.
JP Associate spokesperson was not available for comments.