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Reliance Power is in the process of receiving ₹113 crore as compensation from the power procurers of Tilaiya ultra mega power project as well as nearly ₹600 crore of bank guarantees stuck with the procurers.
However, according to sources, around ₹200 crore of bank guarantees remains stuck with the Coal Ministry after a fresh show-cause notice was issued to Reliance Power on why the amount should not be deducted.
“The process of release of the bank guarantee by the procurers and the payment of the compensation is under way and all formalities are expected to be completed in the next few weeks. As far as the Coal Ministry’s notice is concerned, the company will respond to it in due course,” a person in know of the development said.
On June 21, the Coal Ministry issued a show-cause notice to Reliance Power for deducting the bank guarantee due to delay in development of the Kerandari B & C coal blocks given to the company's erstwhile Tilaiya ultra mega power project.
After termination of the power purchase agreement (PPA) for the Tilaiya UMPP last year, Reliance Power had written to the Coal Ministry for release of the bank guarantee given for the Kerandari B & C coal blocks. However, in the notice put on its website, the Ministry has considered the termination of the PPA of the Tilaiya UMPP as extraneous to the development of the coal blocks, the notice added.
According to the Reliance Power’s statement on Wednesday, it had received a similar notice from the Coal Ministry in December 2013 and responded in detail in January 2014 to which it has not got a response.
Sources in know of the development said that Reliance Power had told the Coal Ministry in January 2014 that since the development of the Kerandari B & C coal mines were to be synchronised with the requirement of the 4,000-MW Tilaiya UMPP, the development schedule of the coal block will be aligned with the development schedule of the power plant.
The company had also submitted to the Coal Ministry that there had been a four-year delay in fulfilment of conditions by the power procurers leading to a change in the schedule of development of the power plant and the coal mine. Reliance Power had also pointed to the non-availability of land for the coal block and power plant as well as pending clearances from the Ministry of Environment and Forests as reasons for delay in the development of the coal block and the power plant.
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