The Comptroller and Auditor General (CAG) has softened its stance on the diversion of surplus coal from the Sasan and Tilaiya mines, saying the bid documents permitted such diversion, which was also in line with the coal ministry guidelines.

The CAG had triggered a controversy last October, saying the government?s decision to allow Reliance Power to divert surplus coal from these captive mines violated bid guidelines and entailed a windfall gain of R1.2 lakh crore to the private developer. It now says the gain could be only R15,849 crore.

The CAG has now said although the bid document had spelt out how to use surplus coal from these captive mines, the confusion occurred because the allotment letter did not specify usage parameters upfront. ?This ambiguity rendered bidders to interpret the clause for the usage of surplus coal and vitiated the process of allocation,? it added.

Reliance Power had bagged the Sasan and Tilaiya ultra-mega power projects through bidding route.

?It (change in CAG?s stance) ends a big controversy,? said former Union power secretary RV Shahi, who had played a key role in launch of the UMPP scheme.

The government has now sought the attorney general?s opinion on the matter. The CAG apparently modified its position after examining further documents made available to it by the power ministry relating to UMPP bids.

?Subsequent decision to allow the allocattee to use surplus coal to other projects resulted in accruing of undue benefits to the allocattee to the detriment of ultimate power consumers, as the allocattee was not expected to factor into the value of the surplus coal while offering the bid price for the sale of power,? the auditor said.

The auditor has also slashed its estimate on undue gains to Reliance Power.

?The undue benefit to RPL for Sasan and Tilaiya UMPPs is estimated to be Rs 15,849 crore,? the CAG said in its latest audit report on excess allocation of coal to Reliance Power.

Moher and Moher-Amlohri extension captive blocks allocated for the Sasan UMPP were reserved for Northern Coalfields Ltd (NCL) when the CAG came out with its preliminary audit findings in October. But now, they have been transferred to the Sasan project, a move which necessitated drastic changes in the mining plan for these blocks.

?The de-reservation of Moher and Moher-Amlohri extension from NCL will reduce coal reserves of Amlohri open cast project of NCL by 48 million tonnes and also reduced its project life from 24 to 20 years,? the CAG said on the Sasan UMPP. The CAG had not taken cognizance of these facts in its previous reports.

Earlier, the CAG had pegged the undue gain to Reliance Power at Rs 24,266 crore in its January report when it took for calculation the difference between CIL?s mining costs and its notified price, ignoring Reliance Power?s mining costs for the Sasan and Tilaiya projects.

In its latest report, the auditor has taken as reference Reliance Power?s mining costs and CIL?s notified price for the same grade of coal for calculating the windfall gain to the private developer from diversion of excess coal from Sasan and Tilaiya mines.

While the government has accorded permission to Reliance Power to divert surplus coal from the Sasan mines to its nearby Chitrangi power project in Madhya Pradesh, a final decision is yet to be taken in case of Tilaiya UMPP.