IMG defers bank guarantee issue of Tilaiya UMPP

An inter-ministerial panel has deferred the issue of deduction of bank guarantee with regard to Tilaiya UMPP, which has been relinquished by Reliance Power, as it awaits comments from the Power Ministry.
The Coal Ministry earlier issued show cause notice to Reliance Power asking reasons for delays in developing coal mines allocated for Tilaiya UMPP.
The inter-ministerial group (IMG) met a few days back to deliberate upon the issue of deduction/release of bank guarantee with regard to coal blocks including Kerandari B&C mine submitted by the allocatee company (Reliance Power), an official said.
IMG noted that Power Ministry had informed it that the matter was under process and comments would be provided after due deliberations with stakeholders and requested the Coal Ministry to keep the matter pending for a while, he said.

IMG also noted that Jharkhand Urja Vikas Nigam Ltd (JUVNL), the lead procurer, has not furnished its comments/ clarification in the matter.
"The IMG asked the representative of Ministry of Power as to when the comments of Ministry of Power would be furnished. On this, the representative of Ministry of Power stated that the comments of State Government have been received and is being examined," the official said.

He said the comments of the Power Ministry would be furnished in a week's time.
"The IMG, in view of the above deferred the matter in view of pending comments of Ministry of Power," the official said.

Reliance Power/JIPL (Jharkhand Integrated Power Ltd) was allocated Kerandari B&C coal block for using coal captively in the Tilaiya Ultra Mega Power Project (UMPP), however, Reliance Power has relinquished it.
'Agree to Terminate' option was exercised and accepted voluntarily by RPL and the Procurers. This act, though authorised, is extraneous to the course of development of coal block.
The government had earlier said that it has been decided to place the matter of deduction of bank guarantee (BG) submitted by Reliance Power for Kerandari B&C coal block before the Inter-Ministerial Group for making recommendations to the Government.
In 2007 the coal ministry had allocated Kerandari B&C coal block to JIPL, a subsidiary of Power Finance Corporation (PFC) subject to certain conditions.

Further, Reliance Power acquired JIPL from PFC in 2009 after emerging as the lowest bidder in the International Competitive Bidding process for Tilaiya UMPP. Subsequently, RPL communicated that it had terminated the PPA and relinquished Tiliaya UMPP.
Hence, Reliance Power requested the coal ministry for release of bank guarantee (BG) submitted by it for Kerandari B&C coal block.