Reliance Power moves court over coal block cancellation

Reliance Power on Thursday said it has filed a writ petition in the Delhi High Court, challenging the government's withdrawal of the Chhatrasal coal block for the company's Sasan ultra mega power project in Madhya Pradesh.

In a filing with the stock exchanges, the company said the relevant gazette notification of May 7 by which the letter allotting the coal black was cancelled has been challenged

The company has contended that prior to bid submission for the projects, three coal blocks -- Moher, Moher-Amlohri Extension and Chhatrasal -- having a reserve of around 800 million tonnes were set aside for Sasan Power, a wholly-owned subsidiary then of the state-run Power Finance Corp.

Reliance Power has argued that the allocation of the three blocks and the availability of coal in the lifetime of the reserve availability was an integral part of bidding terms and conditions. It was the main reason why a competitive tariff of Rs.1.196 per unit was bid by Reliance Power

The company has also held that the cancellation of the notification, based on a judgment of the Supreme Court, was not not legally tenable. It has contended that the apex court order of Sep 14 last year did not make the coal blocks allotted to Sasan project its subject matter.

The company further contended that the court had specifically exepted the blocks in the order.

The Supreme Court had cancelled all but four of the 218 coal blocks that were allocated by the government over the past two decades. But the bench of then chief justice R.M. Lodha had exempted four blocks allotted to Reliance Power, NTPC and Steel Authority.

In April this year, the Anil Ambani-led Reliance Power had said that it has fully attained commercial operations of the Rs.27,000-crore Sasan ultra mega power project, 12 months ahead of schedule, with all the six units generating a total of 3,960 MW of electricity.

The group had also said this was not only the largest integrated coal-mining-cum-power project at a single location in the world, but that the 20-million Moher and Moher-Amlohri mines, which were also fully operational, were the largest in the country.