Nuclear Power Corporation of India (NPCIL) is best placed to take advantage of the India-US nuclear cooperation deal finalised last year, since it is the only company authorised to build and manage atomic power units in the country as of now. Denying that the government-owned NPCIL has been slow in capturing the upside from easier availability of fuel and technology — the company reported a 60 per cent dip in net profit in April-September — chairman and managing director Shreyans Kumar Jain tells Vandana Gombar he is confident of better performance ahead, on the back of increased generation. Excerpts:
When do we start seeing the actual impact of the nuclear cooperation deal in the company’s operations?
We have already started getting the benefit. In this financial year, we are going to see a jump of 640 Mw in capacity running on 100 per cent imported fuel. This fuel will feed three reactors in Rajasthan — RAPS-2 (200 Mw), RAP-5 (220 Mw) and RAPS-6 (220 Mw).
Imported fuel is already being used by us in the older RAPS-2 reactor, which has been restarted and is supplying 100 per cent power. We have completed fuel loading in the new RAPS-5 reactor, now under the International Atomic Energy Agency (IAEA) safeguards. This reactor will be commissioned in a day or two and will start generating power in four to six weeks. Another new reactor, RAPS-6, is progressing well and will go live by year-end or the beginning of next year .
When do the next set of reactors get imported fuel?
Another two reactors in Rajasthan, RAPS-3 and RAPS-4, are also to be put under international safeguards in 2010. That will lead to a generation jump of 100 Mw, as they are currently working at 70 per cent PLF (plant load factor) due to severe constraints on indigenous fuel. That will be a 740 Mw jump in all. Then the reactors at Kakrapar (in Surat, Gujarat) and Narora (in Uttar Pradesh) will follow. All this will lead to a big jump in the NPCIL numbers.
There is a perception that the progress on the separation plan (which identifies the reactors to be put under international safeguards) has been tardy. Is that correct?
We are well on time on implementation of the safeguards arrangement and the separation plan. Under the original plan, RAPS-3 and RAPS-4 are to be put under international safeguards in 2010-11, and we are already working on them. This may be done in the first quarter.
Imported fuel is one part of the upside. The real big upside for the company will come when the reactors are imported, installed and start functioning. When does that happen?
It is in process. The intergovernmental agreement is not yet ratified by the French government. We have had a few rounds of discussion for the arrangement and procedures for the enrichment and reprocessing of fuel with the Americans. It has to be completed by August 2010, though we are hoping it will be done much earlier. The Russians have already submitted the techno-commercial offer and three rounds of discussion have been completed for additional units at Kudankulam.
Are you talking to the vendors like Areva and GE, meanwhile?
Yes. We are in dialogue with these companies, so we do not waste time while waiting for the final green signal. In fact the “techno” part of the techno-commercial contract is almost complete. That is a complex process, given that we are not buying a black box. The Prime Minister has already made it clear that we are not going to import reactors on a turn-key basis. We cannot afford that. Indigenisation will make the project viable. Also, there is a local mature industry. We want to have high indigenous content in these plants, as much as 80 per cent in the last set of imports. In the case of Areva, for instance, in the next six weeks or so, the Indian side will know what job they will do and Areva will know what job needs to be done.
What happens to the indigenous programme?
That is going strong. I have got full financial approval from the government for Kakarapar-3 and 4 and Rajasthan-7 and 8. These are all 700 Mw units. The ground break at Kakrapar will take place next month, while in Rajasthan it will be in the first quarter of next year.
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The long-term view is promising. However, the latest numbers show a sharp 60 per cent drop in net profit in the April-September period to Rs 101 crore, from Rs 254 crore in the same period last year. What is the reason for that?
Actual generation had shot up during the period but we were hit by a strike at the Uranium Corporation of India, the monopoly fuel supplier to the company. We suffered generation loss. Then there was the modification of the capital structure of the Tarapur (3 & 4) plant, where instead of 1:1 debt to equity ratio, we went for a 70:30 structure. The construction was completed well in time, which led to saving of Rs 600 crore. We had to revise the tariff downwards as a result.
What is the outlook for the year, then? Will you be able to meet last year’s numbers?
We will do better than last year on net profit. There is no doubt about it. We are expecting to increase generation from 14,000 million units to 18,000-20,000 million units this year. This 40 per cent increase in generation will mean a 40 per cent increase in the sale of power.
What is the average tariff that you get per unit of power?
It is Rs 2.33 per unit on average. Depending on the vintage of the reactor, it could be anywhere from 95p to Rs 2.65 per unit. This year, the tariff will not be more than Rs 2.50 per unit.
What will be the tariff from the new reactors?
The life of the reactor is now 60 years. The tariff will depend on how you load it — at the front end or at the back end. We have to ensure project viability, since, as you know, the company gets no subsidy and neither is there any possibility of that.