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'CAG report on RPower skipped AG's view'

delhi Updated: Aug 24, 2012 18:59 IST

Finance minister P Chidambaram on Friday said the CAG report, which stated that Reliance Power unduly gained over Rs 29,000 crore by diverting surplus coal from mines assigned to its project in Madhya Pradesh, skipped the attorney general's view on the matter.

"The CAG report did not take note of the Attorney General's opinion, nor the EGoM subsequent decision, which is regrettable," he told reporters in New Delhi on Friday.

"The recommendation to allot the Chhatrasal block and for surplus coal to Chitrangi came from the chief minister of Madhya Pradesh," Chidambaram said.

The Comptroller and Auditor General in its report, tabled in Parliament last week, said the post-bid concession of allowing Reliance Power to use excess coal from Sasan project mines in its other projects "not only vitiated the bidding process but also resulted in undue benefit" to the firm.

An empowered group of ministers (EGOM), headed by the then finance minister Pranab Mukherjee, had permitted the company to divert excess coal from three mines -- Moher, Moher Amlohri and Chhatrasal -- to another project at Chitrangi.

Based on Attorney General's opinion, the EGoM on UMPPs has affirmed in April, 2012 that the decision to permit usage of surplus coal from Sasan UMPP is a well considered decision.

"We have to follow certain rules of business. If the EGoM (empowered group of ministers) has taken a decision, the ministry is bound to follow the decision," he said.

The ministry will consider all of that (CAG report, opinion of the Attorney General and EGoM's decision) and if necessary will bring a paper either to the EGoM or the Cabinet and then take a decision, he added.

RPower had won the Sasan project in Madhya Pradesh quoting a power tariff of Rs 1.196 per unit in 2006.

It won Chitrangi project, to which Sasan coal is being diverted, by bidding a tariff of Rs 2.45-3.702 per unit.