NPCIL, Areva strive to reach commercial deal

Cost sharing for Jaitapur project due to additional safety measures a contentious issue

Ahead of French President François Hollande's visit on the occasion of Republic Day, the Nuclear Power Corporation of India Ltd (NPCIL) and nuclear energy player Areva are striving to close the crucial commercial agreement for the 9,900-Mw Jaitapur nuclear power project in Maharashtra. Initially, Areva will supply two European pressurised reactors (EPRs) of 1,650-Mw each for the project. The contentious issue continues to be sharing of cost due to the application of additional safety measures in the wake of the Fukushima nuclear accident in March 2011.

The early works contract was signed between NPCIL and Areva in December 2010. Atomic Energy Commission former chairman RK Sinha two years ago had indicated that the per unit tariff of the Jaitapur project would be Rs 6.50. The project is running behind schedule for at least three-and-a-half years.

THE JAITAPUR DEAL

• NPCIL and Areva signed early works contract in December 2010
• Fukushima nuclear accident in March 2011 and subsequent review led to the need to increase safety measures at Jaitapur and other nuclear plants
• Per unit tariff of Jaitapur project is indicated at Rs 6.50 per unit
• Areva and L&T signed deal for localisation of equipment

Areva India president Manju Gupta said teams from both sides were working together under the pre-engineering agreement (PEA), signed in April 2015, during Prime Minister Narendra Modi’s visit to France. Gupta told Business Standard, ''Under this frame, Areva is supporting NPCIL in preliminary assessment of EPR licensability in India as per the Indian regulations. This will also enable both the companies to go a step further towards the project development."

She also said they were working with L&T, in the frame of an MoU signed in April 2015, to explore areas of collaboration between the two companies. "This may include increased localisation for the Jaitapur project and contribute to the ‘Make in India’ initiative. With the strong commitment from both the sides, we look forward to reaching a common understanding on the viability of the project,'' Gupta said.

An NPCIL executive, who is involved in the negotiations with Areva, said the technical and commercial talks were currently under way. Efforts were being made to reach at the commercial agreement. As on date, necessary technical and regulatory requirements are in place. Infrastructure activities and pre-construction works are in progress at the project site.

The additional safety applications include strengthening provision for monitoring of critical parameter under prolonged loss of power, provision of diesel-driven pumps for transfer of water, additional mobile pumps and fire tenders and steps for augmentation of onsite water storage, wherever required.

NPCIL's former chairman and managing director SK Jain said the cost was subjective because in dollar terms the price, quoted by all the foreign suppliers, was only marginally higher than what they had quoted in 2005 and 2006. ''Marginally higher cost in dollar terms is on account of taking into consideration safety of reactors to a much higher level. It is unfortunate that dollar, which was at that time Rs 45-48 is now at Rs 67-plus. In dollar terms today too, offers by Areva and other reactor suppliers are very attractive,'' he said.