With India and France agreeing to expedite the setting up of the Jaitapur nuclear power plant, the move is expected to help settle several long-pending issues, including those regarding the technicalities and pricing of the project, sources said.
During the visit to France of Prime Minister Narendra Modi, India signed two agreements related to the Jaitapur Nuclear Power Plant (JNPP).
The first, a pre-engineering agreement signed with AREVA, Alstom and Nuclear Power Corporation of India (NPCIL), aims to bring greater clarity on all technical aspects of the project.
The agreement is also expected to allay the apprehensions of the Indian side, especially with the new EPR (European Pressurised Reactors) technology, which are to be used in Jaitapur.
A major bone of contention between the two sides is the high cost of the electricity.
While the cost of the electricity generated by Kudankulam Nuclear Power Project (KKNPP) Units I and II hovers between Rs 3 to 3.50 per unit, for JNPP, it is expected to be Rs 9.14 per unit.
Sources said the high costs were a major impediment during the talks as DAE is ready for a price between Rs 6 to Rs 6.50 per unit.
The pre-agreement also seeks to bring clarity on the price factor. The second agreement signed between AREVA and Larsen and Turbo -- a private player -- is aimed at "reduction of cost by increasing localisation to improve the financial viability of the project".
L&T has been one of the crucial partners of the Indian nuclear industry and has been a part of several projects of the Department of Atomic Energy, especially NPCIL.
It is also a part of the Indian Atomic Industrial Forum, which provides equipment for crucial nuclear and space projects.
For JNPP, AREVA was planning to procure some critical equipment from Japan.
But with the long-pending deal between Japan and India failing to fructify, the finalisation of the actual price of the project was also held up.
The delay also increased the cost of the project but, more importantly, even seven years after the signing of the nuclear cooperation deal between France and India, there were no "visible" results to show for the initiative.
However, with the transfer of technology, some of the equipment could be produced in India, which could have an overall bearing on the cost.
After the Indo-French nuclear cooperation agreement in 2008, NPCIL, with the help of AREVA, was to construct six reactors of 1650 MW each.
Upon completion, JNPP will the produce the maximum energy among the nuclear power plants in the country.