Reliance Power moves court against cancellation of Sasan coal block

Reliance Power Ltd (RPower) and its wholly-owned subsidiary Sasan Power Ltd today filed a petition in the Delhi High Court against the coal ministry's decision to cancel allocation of a coal block in Madhya Pradesh for the company's Sasan ultra mega power project there.

RPower moved the high court challenging the coal ministry's notification cancelling allocation over the supply of surplus coal of up to nine million tonnes per annum from Moher, Moher-Amlohri extension and Chhatrasal coal mines to a thermal power plant owned by Chitrangi Power Pvt Ltd, a subsidiary of RPower.

The government had on May 7 issued a notification by which it had cancelled the allocation of Chhatrasal, one of the three coal blocks, to Reliance Power's Sasan project in Madhya Pradesh in 2006.

The government's decision to cancel the coal block is in line with a Supreme Court directive forbidding commercial use of surplus coal by diverting it from one unit to another.

However, Reliance Power in its petition said the coal blocks allocated to UMPPs were not the subject matter of the Supreme Court judgement.

The Supreme Court, which cancelled 204 captive coal mines allocated to various companies, had ruled on 25 August that "coal blocks allocated for UMPP would only be used for UMPP and no diversion of coal for commercial exploitation would be permitted".

Through the notification, the coal ministry withdrew a special dispensation given to Reliance Power and restricted production of coal from Moher and Moher Amlohri coal blocks to 16 million tonnes per annum against the earlier 20 mtpa. 

RPower had, in March this year, said that its Sasan project has been fully commissioned.

Sasan project is an integrated power plant-cum-coal mining project at a single location, involving an investment of over Rs27,000 crore, the company has said.