Reliance Power today termed calculations made by the CAG as "erroneous" and said the company did not reap any undue benefits.
The Comptroller and Auditor General (CAG) of India in its audit report tabled in the Parliament said Reliance Power unduly gained Rs 29,033 crore by diverting surplus coal from mines allocated for its Sasan UMPP in Madhya Pradesh.
"The CAG calculations are erroneous, and there is no undue benefit to Reliance Power, as the power from surplus coal is being sold on tariff-based competitive bidding basis," Reliance Power CEO JP Chalasani said in a statement.
Chalasani said that CAG has quantified the benefit to Reliance Power on the basis of differential tariff between Sasan and Chitrangi projects.
He said: "No two projects can ever have the same tariff even if the coal sources is the same, and even if the project is coming in the same location as an expansion".
Stating that the company brought out inconsistencies in CAG's computations between January-March 2012, Chalasani said: "We have neither received the basis for the numbers used to calculate undue benefit, nor have our representations been fully considered".
In its report, the CAG said permission to use of excess coal from Moher, Moher Amlohri and Chhatrasal blocks allocated to Sasan power project after its award not only vitiated the bidding process but also resulted in undue benefit to the company.
Chalasani said that coal blocks were allotted to Sasan UMPP before the bid and the company had no role in allotment.
"All bidders were aware of the existence of surplus coal reserves and the right of the government to permit usage of surplus coal... There is no diversion of coal from blocks meant for Sasan UMPP — the issue pertains to usage of surplus coal from the blocks allotted for power generation," he said.
The auditor has also demanded a review of the decision to give a third coal mine to Sasan project.
Reliance Power said CAG's recommendations of reviewing the decision on surplus coal permission to Sasan UMPP and allocation of coal blocks to the project has already been implemented by the government.