Tata plea against coal diversion by R-Power misleading: Govt

Rejecting the allegation that it favoured Anil Dhirubhai Ambani Group firm Reliance Power for usage of coal from mines alloted to the Rs 20,000 crore (Rs 200 billion) Sasan Power Project, the government has asked the Supreme Court to reject the petition of Tata Power as 'misleading and erroneous'.

It also questioned the locus standi of Tata Power, saying, "The petitioner cannot allege violation of any legal right vis-a-vis tender process, as it waived its right by not extending the bid."

In an affidavit filed before the apex court, the government said that the petition challenging the use of coal for projects other than 4,000-MW Sasan Ultra-Mega Power Project was filed on a totally false basis and 'gives a totally misleading and erroneous impression'.

The Tata petition is scheduled to be heard by the apex court on August 25.

Tata Power is challenging the decision of an empowered group of minister which had allowed R-Power to use excess coal from the captive mines meant for the Sasan project in Madhya Pradesh for another 4,000-MW project at Chitrangi, in the same state.

The government further submitted in its petition that Tata has given no explanation why it did not extend its bid.

"The petitioner did not respond in absence of any specific reasons of doing so," said the government in its 16-page-long affidavit.

On the allegation that Tata was not informed that the coal of the Sasan UMPP would be allowed to be used for another power project, the government said that it had informed all the bidders of the project.

"The communication dated May 25, 2007, was sent to all bidders for extension of the bids and it was mandatory condition that the bids had to be extended. . .the bidding process was still in progress and the petitioner was required to extend the bid to continue to participate in the process," the government said.

It further submitted that two bidders, Tata and Jindal Steel and Power, had not responded to its letter and opted out of the process.

"Accordingly, the bid of the petitioner (Tata) was invalidated and it was no longer a part of the bidding process," the government said.

The government further said that it took a decision on diversion of coal only after Chief Minister of Madhya Pradesh Shivraj Singh Chouhan wrote a letter to the Prime Minister on November 2, 2007, pointing out excess availability of coal at the Sasan UMPP and requested using some of it in the Chitrangi power project alloted to R-Power.

This letter was forwarded to the EGoM, which after due consultation with the Ministry of Coal and other nodal agencies, allowed it.

"The decision of the EGoM to allow the use of incremental coal from the coal blocks allocated for Sasan UMPP was taken after considering all relevant factors, more particularly the need to augment power availability in the state of Madhya Pradesh, which is facing shortage," the government said while attaching the letters of the chief minister and mails sent to all bidders informing them of the extension of bids.

The ministry of power filed an affidavit after the apex court, on July 9, directed the government to file a reply to Tata's allegation that it had allowed rival R-Power to divert surplus coal from Sasan to its other project.

Tata Power, which had lost the bid for the Sasan project, had alleged before the apex court that the government's decision to divert the coal from its captive mines was 'unfair and arbitrary'.

It had also contended that it was never informed that the extra coal from the captive mines would be allowed to be diverted.

Earlier, on April, 2009, a division bench of the Delhi high court had dismissed Tata Power's petition after observing that the company had no locus standi to file this petition as it had left the bidding process in between.

The high court had also observed that there was 'suppression of material facts' by Tata Power and there was nothing on record to suggest that the EGoM, which allowed Reliance Power to divert the coal, did not act in the public interest.

The high court had concurred with the Centre, which had submitted that the Tatas were aware that the incremental coal might be used for other projects.