Reliance Power will have to wait for a new coal surplus policy before it can use the surplus coal from its Tilaiya Ultra Mega Power Project. The Coal Ministry has been asked to formulate a policy for use of surplus or incremental coal available for ultra mega power projects (UMPPs).
Ministerial meeting
A person familiar with the development told Business Line , “The Empowered Group of Ministers (EGoM) in its meeting on April 27 decided to ask the Coal Ministry to formulate a policy keeping in view the opinion given by the Attorney General for the use of surplus or incremental coal.”
A committee of Secretaries will be asked to give its recommendation, followed by inter-ministerial discussions. The Cabinet Committee on Economic Affairs (CCEA) is expected to take a call after that. “One thing that is clear is the new policy will be implemented prospectively,” he added.
According to a senior Government official, this means that the new policy will not affect the permission already given for use of Reliance's Sasan UMPP incremental coal for the Chitrangi Project of Reliance Power.
However, the application of Reliance Power to use surplus coal from blocks allocated to the Tilaiya (in Jharkhand) UMPP will be processed under the new policy on surplus coal.
Earlier decision
It may be recalled that the EGoM had, in the same meeting, agreed to continue with the earlier decision of allowing Reliance Power to use surplus coal from Sasan UMPP for the Chitrangi project. The EGoM had, in its meeting on August 14, 2008, decided to recommend to the Coal Ministry to allow use of incremental coal for other projects.
The matter regarding use of surplus coal is also pending in court. Tata Power has taken issue against Reliance Power's Sasan project. The matter is pending in the Supreme Court.
The Government is looking to set up 16 UMPPs in the country. Each of the projects is given fuel linkages, which means captive supply of coal. Of 16, three (Sasan in Madhya Pradesh, Krishnapatnam in Andhra Pradesh and Tilaiya in Jharkhand) has been awarded to Reliance Power and one (Mundra in Gujarat) to Tata Power.
Shishir.s@thehindu.co.in