HC rejects as infructuous Sasan Power’s plea to mine excess coal

New Delhi: The High Court today termed as infructuous a plea by Sasan Power Ltd, a Reliance Power subsidiary, seeking permission to extract excess coal from two mines in Madhya Pradesh, saying that the Centre was already examining the issue.

A bench of Acting Chief Justice Gita Mittal and C Hari Shankar also noted that an inter ministerial committee had severely criticised the mining being conducted by Sasan Power Ltd (SPL) holding that there was high moisture content in the coal due to water not being properly pumped out.

It also said that SPL was asked to improve the quality of mining.

The committee, led by the chairman, Central Electricity Authority, was formed to examine the issue of requirement of coal for Sasan Ultra Mega Power Project (Sasan UMPP)and give its recommendation.

“In any case, the respondents (Union of India and Ministry of Coal) are examining the requests for increase in the variations in the mining cap on behalf of the petitioner (SPL) on the basis of factual disclosures made by them. The application is therefore, dismissed as infructuous,” the bench said.

It passed the order on the application of the company seeking permission to mine at least 19 million tonnes per annum (MTPA) of coal from Moher and Moher Amlohri Extension coal mines in Madhya Pradesh during the financial year 2017-18.

“We also find that so far as the request of the petitioner to permit increase of the cap for the coal mining is concerned, the Ministry (of Coal) has been taking considered decisions,” it said.

The company had earlier sought permission to mine coal from its two mines in excess of the 17 MTPA cap to enable it to run the 3,960-megawatt Sasan UMPP in the state.

In an affidavit, the coal ministry had told the court that through a letter of February 26 this year, it had permitted Reliance Power, as an interim one-time measure, to extract 18 MTPA in excess of the 17 MTPA cap.

The company was granted the permission to produce additional one million tonne for the financial year ending March 31, 2018.

SPL, in its application, had contended that the mining of 17 MTPA of the mineral allowed from its Moher and Moher Amlohri blocks was not enough to carry out operations till the end of the financial year 2017-18.

The firm had claimed that if it was not allowed to mine another two MTPA, that is up to 19 MTPA, in 2017-18, it would not be able to meet the requirements of Sasan UMPP that supplies electricity to 14 discoms in seven states, including Delhi.

It had submitted that in such a situation, the threat of a shutdown was looming large over the operation of the power project.

According to the company, it supplied electricity under a 25-year-long power purchase agreement on a tariff of Rs 1.196 per kWh to 14 discoms across the states of Delhi, Haryana, Madhya Pradesh, Punjab, Rajasthan, Uttar Pradesh and Uttarakhand.

The application was filed in the main writ petition by Reliance Power and Sasan challenging the Centre’s May 7, 2015, decision to cancel one of the three coal blocks allocated to Sasan UMPP.

The government had justified the cancellation, saying the unit’s coal requirement could be met by the other two mines, Moher and Moher-Amlohri extension.

The integrated power plant-cum-coal mining project at a single location involved an investment of over Rs 27,000 crore, the petition said.

HC seeks Centre’s response on a plea by Sasan Power Ltd, a Reliance Power subsidiary

 The Delhi High Court today sought the Centre’s response on a plea by Sasan Power Ltd, a Reliance Power subsidiary, for permission to mine coal from its two coal blocks in excess of the 17 MTPA cap to enable it to run its 3,960 megawatt power project in Madhya Pradesh.

The company has contended that if it was not allowed to mine another 2 MTPA, that is up to 19 MTPA, in this financial year, it will not be able to meet the requirements of its Sasan Ultra Mega Power Project (UMPP) that supplies electricity to 14 discoms in seven states including Delhi.

A bench of Acting Chief Justice Gita Mittal and Justice C Hari Shankar issued notice to the Centre and listed the matter for hearing on February 7.

Sasan has contended in its application that the threat of a shutdown was looming large over the operation of the power project if it was not allowed to mine coal in excess of the cap set by the Centre.

During the hearing, senior advocate P Chidambaram, appearing for the company, submitted that it was an urgent issue as it was running short of coal.

The application has contended that the mining of 17 million tonne per annum (MTPA) of coal allowed from its two blocks Moher and Moher-Amlohri blocks in the state was not enough to carry out operations till the end of this financial year.

It has said that the approved quantity of coal would not meet the requirement for running the plant for the last 10 days of March this year, severely affecting 42 crore consumers.

Such a situation will also entail a loss of around Rs 130 crore for the company, while the discoms would have to shell out more than Rs 200 crore to purchase power from other sellers to provide electricity to their 42 crore consumers, it has claimed.

The company has said in its plea that it supplied electricity under a 25-year long term power purchase agreement on a tariff of Rs 1.196 per kWh to 14 discoms across the states of Delhi, Haryana, Madhya Pradesh, Punjab, Rajasthan, Uttar Pradesh and Uttarakhand.

In its application seeking permission to mine 19 MTPA, Sasan has contended that this will also help it to maintain additional stock of coal of 1.25 million tonne for meeting any exigency which might disrupt coal production.

It has also claimed that it exhausted most of its accumulated stock last year to run its plant when it had to stop mining after hitting the 17 MTPA cap.

The application was filed in the main writ petition by Reliance Power and Sasan challenging the Centre’s May 7, 2015, decision to cancel one of the three coal blocks allocated to Sasan UMPP.

The government had justified the cancellation saying the unit’s coal requirement could be met by the other two mines, Moher and Moher-Amlohri extension.

Sasan project is an integrated power plant-cum-coal mining project at a single location, involving an investment of over Rs 27,000 crore, Reliance has said in its petition.