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Parliamentary panel says Reliance Power ‘ineligible’ for three UMPPs, calls for probe

Calling for a probe into award of three ultra mega power projects to Reliance Power, a Parliamentary panel today 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.

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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, the actual experience to the tune of Rs 3,123.88 crore (Sasan and Mundra), Rs 2137.49 crore (Krishnapatnam) and Rs 2,254.61 crore (Tilaiya) may not conform to the stipulated qualifying requirement.

While Tata Power won Mundra project, RPL won the remaining three.

To Power Ministry’s contention that RPL submitted an experience certificate signed by a director and auditor, the PAC said “Auditor’s certificate did not specifically indicate whether the costs pertained to the projects commissioned during the last 10 years.”


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