R-Power got 24k cr govt favour: CAG

Two Audits Had Earlier Put The Benefit From UMPP Projects At 1.2L-1.8L Cr

New Delhi: The government auditor has pruned by 87% the value of windfall gains Reliance Power had alleged to have made from concessions given by the government for two of the Centre's showpiece projects the Anil Ambani group company is building. 

    A draft audit report of the Comptroller and Auditor General (CAG) on allocation of coal blocks and augmentation of production in January quantified the government's "undue benefit" to Reliance Power at Rs 24,266 crore—calculated over 25 years—from two ultra-mega power projects (UMPP) contracted to the firm. 
    A company spokesperson did not reply to queries mailed by TOI. Reliance Power is building the 4,000-mw projects at Sasan (Madhya Pradesh) and Tilayia (Jharkhand), to be fuelled by domestic coal from captive mines. Last August, CAG's draft audit report on UMPP had argued that the government favoured the company by allowing it to use surplus coal from the captive mines of Sasan and Tilaiya projects in its other projects. The August report by CAG's principal director of audit in Delhi had quantified Reliance Power's gains from the decision, taken by a ministerial panel after completion of the bidding process, at Rs 1.8 lakh crore. A subsequent audit report last October by principal director of audit and audit board member M K Biswas brought down the amount to Rs 1.2 lakh crore. 
    The latest—and the third —quantification of Reliance Power's additional gains comes from the principal director of commercial audit, Kolkata, in his report on how Coal India's benefits from mines allocated to it stack upagainst captive mines given to private players. 
    "After deducting the cost of production from the selling price of coal per unit of a comparable Coal India mine (Piparwar project) prevailing as of March 31, 2011... total undue benefit to RPL for Tilayia was Rs 19,924 crore and Sasan Rs 4,342.23 crore," the draft report on Coal India's performance said. CAG's October draft had quantified the gains at Rs 42,009 crore from Sasan and Rs 78,078 crore from Tilaiya. The numbers were calculated on the basis of the quantity of surplus coal Reliance Power had said it would produce from the allocated mines over the 25-year life of the power projects and differential between per unit production cost and market price. 
    CASH BLOW 

• CAG has calculated the govt's 'undue benefit' from two UMPPs contracted to Reliance Power over 25 yrs 

• The company is building the 4,000-mw projects at Sasan (Madhya Pradesh) and Tilayia (Jharkhand), to be fuelled by domestic coal from captive mines 

• In August, CAG's draft audit report on UMPP had argued that govt favoured R-Power by allowing it to use surplus coal from captive mines