How did RPower corner three projects, asks Panel
Calling for a probe into award of three ultra mega power projects to Reliance Power, a Parliamentary panel on Wednesday said the Power Ministry selected an “ineligible bidder” for Tilaiya, Sasan and Krishnapatnam projects. The report by Parliament’s Public Accounts Committee (PAC) was tabled in Parliament a day after Reliance Power pulled out Tilaiya power project in Jharkhand, citing inordinate delay in land acquisition.
The damning report by the PAC headed by Congress leader K V Thomas, expressed serious concern over the manner in which ultra mega power projects (UMPPs) were awarded. The PAC said Reliance Power “which did not fulfill the minimum technical qualifying criteria stipulated... was selected as the successful bidder” for these projects with 3,960 MW capacity each. It wanted a probe into how an “ineligible” company walked away with UMPPs.
When contacted, a Reliance Power spokesperson said: “The matter is subjudice and pending in Supreme Court.” UMPP is a coal-based power project with 4,000 MW generation capacity. Also, surplus coal from Chitrangi mine, which was to supply feedstock for the Sasan project so that it generates power at bid cost of Rs 1.19 a unit, was allowed to be diverted to the firm’s other power project whose tarif was already fixed based on coal linkage from costlier sources.
The panel recommended “the government to de-allocate the surplus coal/coal block from Sasan project and utilise the same for sovereign national interest in consonance with the avowed objectives of passing on the benefit of cheaper coal to the consumers.”
It said the minimum technical qualifying criteria in the tender for four ultra mega power projects stipulated that bidder should have experience of developing projects in the last 10 years with aggregate capital costs of not not less than Rs 3,000 crore.
“The committee note that a major part of the experiences claimed by RPL (Reliance Power) was based on additions to the fixed assets instead of the prescribed capital expenditure pertaining to projects commissioned during the last 10 years,” it said.
The PAC said the total experience of Rs 4,416.60 crore, Rs 3,430.21 crore and Rs 3,505.41 crore claimed by RPL while bidding for Sasan and Mundra, Krishnapatnam and Tilaiya respectively.
J’khand bares Anil arm-twisting
Within 24 hours of the Anil Ambani-led Reliance Power’s subsidiary, Jharkhand Integrated Power Limited (JIPL) announcing to terminate the Power Purchase Agreement (PPA) citing land acquisition delay as the reason, Jharkhand chief secretary Rajiv Gauba described it as an arm-twisting mechanism for raising the power tariff beyond what was bid in the PPA.
The state government on Wednesday blew off the lid of corporate conspiracy that worked behind Reliance Power, pulling out of the 4000MW Tilaiya Ultra Mega Power Project (UMPP).
Putting the onus back on Reliance Power, Gauba said the unilateral decision of the corporate at a time when talks and actions for all pending processes were underway, on a fast track, was beyond his understanding. “They (Reliance) never raised the issue of land or forest clearance during the power secretaries’ meet on April 17. Instead, what they were concerned about was the revision of power tariff,” he said.
Gauba added that the company vice-president had recently met deputy commissioner, Hazaribag, and expressed readiness to submit the land requisition in new format as was amended and required by the state government.
Reliance Power bagged the Tilaiya UMPP from Power Finance Corporation (PFC) in 2009 by aggressive bidding, quoting as low as Rs 1.77 per unit. Gauba said aggressive bidding was done just to acquire the project and later the company was looking for ways to pull out of it. “After all they are private players and we cannot compel them to continue with the project, but citing improper reasons like land acquisition and forest clearance delay, sends a wrong message about the state,” he said.
Gauba said Reliance Power had approached the Central electricity Authority (CEA) to raise the tariff in September 2013, which was subsequently put before the energy secretaries meet as well.
Gauba said 417 acre land was transferred immediately but no progress has been made even on that. “We agree that the project required more land, including 1,220 acre forest land, which passed stage II clearance of the government of India,” he said. As the project was transferred from PFC to a private company, the government of India directed it to pay the price of forest land apart from compensatory afforestation and given the absence of any land pricing mechanism for forest land, the issue was held up. Gauba said that recently state worked it out with the centre and fixed a price of about Rs.300 crore for the plot of forest land being transferred to the company. “May be they were not ready to pay that price and preferred pulling out of the project,” he said.
Asked as to what would be fate of Tilaiya UMPP now, Gauba said that the matter would be discussed with the ministry of power. “We would finish ongoing processes of land acquisition, tie up of water reservoir and linkage with a coal block thereafter there could be several models for development of the project,” he said. One such option could be UMPP on ‘plug and play’ basis, recently envisaged by the Centre for which state would carry out all formalities and invite a suitable party to commission and operate. Gauba however said that final decision about the model would be taken in consultation with the power ministry.