Reliance Power rejects CAG claims, says got no favours on Sasan project

New Delhi: Countering CAG’s observations, Reliance Power today said it was not given any exemption at the time of acquiring forest land for its 4,000 MW ultra mega power project at Sasan in Madhya Pradesh.

“The observations of the CAG (Comptroller and Auditor General of India) regarding exemption given to Sasan Power Ltd from acquiring non-forest land for compensatory afforestation are misplaced and bereft of facts,” Reliance Power said in a statement.[caption id=“attachment_1091041” align=“alignleft” width=“380”]  Power project problems. Reuters[/caption]

Sasan Power Ltd (SPL) is a subsidiary of Reliance Power for setting up the 4,000 MW plant.

In its report on Compensatory Afforestation in India, tabled in Parliament, CAG said that based on an ineligible certificate issued by the chief secretary, the Ministry of Environment and Forests exempted the company from providing non-forest land of 1,384.96 hectare.

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It observed that it is a violation of the Forest (Conservation) Act, 1980 which mandates a company setting up an ultra mega power project or coal mining project to provide equivalent area of 1,384.96 hectare of non-forest land for the compensatory afforestation.

Reliance Power said: “As per the bidding conditions of the project and Power Purchase Agreement (PPA) signed with procurers, the responsibility for acquiring the land for the project and the mines is that of state government where the project is being executed.”

It added: “Any increase in cost incurred on acquiring non-forest land for compensatory afforestation would have increased the cost of the project which in line with the bidding conditions, has to be borne by the power procurers from various states.”

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This would have led to higher tariff for the power generated from the Sasan UMPP, which would eventually be borne by the consumer, it said.

Therefore exempting Sasan from acquiring non-forest land for compensatory afforestation has in no way benefited or extended any “undue favour” as alleged by CAG to Sasan Power Ltd, the statement added.

PTI