Tata questions Govt move letting Reliance Power divert Sasan coal | business | Hindustan Times
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Tata questions Govt move letting Reliance Power divert Sasan coal

business Updated: Jan 05, 2009 18:05 IST

Tata Power Company has moved the Delhi High Court challenging the government's decision to allow Anil Ambani-led Reliance Power to divert coal from the captive mines of Sasan Ultra Mega Power Project for use in other projects.

Terming the government's decision as "arbitrary" and "illegal," TPC - one of the bidders for the Sasan project
said that the government should be directed to produce all records along with the Letter of Intent issued to RPower on August 1, 2007 for the Sasan UMPP.

Besides, it also sought documents of other consequential contracts entered into between them including power purchase agreement, as it claimed that other bidders were not aware of the provision to use coal from captive mines for other projects.

"Arbitrary and illegal actions of the Respondents (Coal Ministry and PFC) in granting approval to divert coal
from the captive coal mines of Sasan UMPP to RPower-successful bidder-for use in other projects is completely contrary to the express terms of the Bid Documents disclosed to all the bidders in the Bidding Process and changes the entire operating economics of Sasan UMPP," TPC said in its petition.

"The petition seeks to challenge... the decision making process as well, by which the RPower was first awarded an ultra mega power project at Sasan on certain specified terms (pursuant to a competitive bidding process) and then radically altered those terms, thereby changing the entire economics of the operation of the said Project," contended TPC.

The company further submitted that as per the terms of the tender for the 3,960 MW Sasan UMPP, its three coal blocks - Moher, Moher-Amlori Extension and Chhatrasal - were allocated to RPower for exclusive of the plant.