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Government to soon prepare draft on monitoring R-Power's Sasan project excess coal usage

New Delhi:

Power and Coal Ministries will soon prepare a draft on modalities for monitoring safeguards related to Reliance Power's utilising excess coal from the blocks allocated for Sasan Ultra Mega Power Project (UMPP), for its another project in Chitrangi.

Officials from the two Ministries today held discussions on the issue.

"We discussed certain things. The focus is that Sasan UMPP has the first right on usage of coal from the blocks allocated for the project," a senior Power Ministry official said after the meeting.

A draft in this regard would be prepared soon in consultation with the Coal Ministry, he said.

Sources said the meeting was to discuss a suitable mechanism to monitor the safeguards stipulated by the EGoM about utilisation of incremental coal from Sasan blocks for the Chitrangi project.

In April, an EGoM headed by the then Finance Minister Pranab Mukherjee had decided not to review the earlier decision allowing Reliance Power to use excess coal from the Sasan UMPP mines for the Chitrangi project.

Both Sasan and Chitrangi projects are in Madhya Pradesh.     

The first unit of Sasan UMPP is expected to be commissioned in the next few weeks.

"We stand by that decision (in 2008)... We cannot review decisions of the past but we can certainly look at the implication of those decisions in changing circumstances and what we need to do in the future," the then Law Minister Salman Khurshid had said after the EGoM meeting on April 28.

Mr Khurshid had said the Attorney General had given an opinion that "surplus coal is such coal... that is available after satisfying the needs of a UMPP.

"Now what to do with the surplus coal is the question and this is to be seen in a context that you have not to discourage a developer from producing coal".

Reliance Power bagged the 3,960 MW Sasan UMPP in 2007 through competitive bidding. The company was allotted Moher, Moher-Almohri and Chhatrasal captive coal mines for developing the project.

At the peak, these blocks' can produce up to 25 million tonnes of coal per annum. Moher, Moher-Almohri can produce 20 million tonnes, while Chhatrasal can produce 5 million tonnes.

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