New Delhi, Aug 17 - Reliance Power unduly gained over Rs 29,000 crore by diverting surplus coal from mines assigned to its Sasan power project, the CAG said Friday, demanding a review of the decision to give a third coal mine to the project.

The Comptroller and Auditor General of India in its audit report tabled in Parliament said the post-bid concession of allowing RPL to use excess coal from Sasan project mines in its other projects "not only vitiated the bidding process but also resulted in undue benefit" to the Anil Ambani-led firm.

The auditor questioned why a third mine was allocated to Sasan project by snatching it from state-owned NTPC, when it was not established that two previously earmarked mines would be insufficient to generate 3,960 MW of power.

RPL had won the Sasan project in Madhya Pradesh quoting a power tariff of Rs 1.196 per unit in 2006. It got Chitrangi project, to which Sasan coal is being diverted, by bidding a tariff of Rs 2.45-3.702 per unit.

Reacting to the CAG report, Reliance Power Ltd (RPL) said, "Surplus coal has been made possible through use of advanced coal mining technology and large capital expenditure" and claimed no condition was violated "as the bid documents gave the right to the government to permit use of surplus coal".

"The permission to use surplus coal in other projects of the bidder after award of the contract based on acceptance of the lowest tariff, vitiated the sanctity of the bidding process which would result in post-bid concessions to the developer having significant financial implication," CAG said.

"This decision resulted in financial benefit of Rs 29,033 crore with a net present value of Rs 11,852 crore to the project developer (RPL)," the official auditor said. PTI