Sasan Power Limited (SPL) was a Special Purpose Vehicle (SPV) created for development of Sasan Ultra Mega Power Project (UMPP).
SPL was a wholly owned subsidiary of Power Finance Corporation (PFC) but in August 2007 it was transferred to Reliance Power Limited (RPL).
In its report, 'Compensatory Afforestation in India' presented before the Parliament on Friday, the CAG noted that according to guidelines and clarifications for diversion of forest lands for non-forest purpose under the Forest (Conservation) Act, 1980, SPL had to provide equivalent area of 1,384.96 hectare of non-forest land for the compensatory afforestation.
It said the MoEF exempted SPL from providing equivalent area of non-forest land for the compensatory afforestation, on basis of the certificate from the Chief Secretary that no forest land was available in Sidhi District.
The MoEF did not ask SPL to furnish such certificate for entire Madhya Pradesh or make efforts for identification of non-forest land for compensatory afforestation anywhere else in the State. Instead, SPL was allowed compensatory afforestation over double degraded forest land even though it was not eligible for such an exemption.
"Based on an ineligible certificate issued by the Chief Secretary, the Ministry exempted SPL from providing non-forest land in violation of the Forest (Conservation) Act 1980. The MoEF not only did not exercise due diligence in ensuring compliance with conditions but also inexplicably overlooked the deficiencies in the certificate pointed out by a subordinate authority while granting exemption in the instant case," the CAG stated.
As far as possible, the non-forest land for compensatory afforestation had to be identified contiguous to or in the proximity of Sidhi district and in the event that non-forest land for compensatory afforestation was not available in the Sidhi district, non-forest land could have been identified anywhere else in Madhya Pradesh, the CAG said.
It said the MoEF had insisted for compensatory afforestation over the non-forest land in latest project of the same company in nearby location in Madhya Pradesh, which clearly illustrates that in the earlier case undue favour were extended to M/s Sasan Power Limited.
--IBNS (Posted on 06-09-2013)