Jaitapur atomic project: Areva seeks help of French govt & lenders on cost sharing

Areva, the Paris-based partner for the government in the Jaitapur nuclear power project in Maharashtra, has asked the French government and banks for help on cost-sharing.

The company is supposed to supply two reactors of 1,650 Mw each to the Nuclear Power Corporation (NPC) for Jaitapur but the negotiations on cost have still to conclude in an agreement.

An NPC official, who did not want to be identified, said: “Areva has indicated the capital cost per Mw will be Rs 24-25 crore, while we are insisting on Rs 12-14 crore. We expect Areva to cooperate by accepting a higher level of localisation to reduce the capital cost.”

Areva does not want to reduce its share on supply of reactors and components, it appears.

It appears to have taken up the cost sharing issue with treasury officials of the French government and lenders during a meeting in France on June 5 and 6 with an Indian team.

The team from India comprised official for the department of atomic energy and NPC.

Areva declined to comment, when asked, on the specifics of the issue and the help sought.

The NPC official said it was envisaged that the rate charged for supply from Jaitapur at the time of scheduled commissioning in 2017-18 would be equivalent to that from a new coal-based power project.

This was estimated to be Rs 4-7 a unit. The official said costs had risen since this calculation, given the incorporation of additional safety features after the global reviews in the wake of the Fukushima nuclear accident of March 2011 in Japan.

Areva and NPC are still to sign the commercial agreement for Jaitapur t and to resolve contentious issues on India’s Civil Liability for Nuclear Damages Bill, credit arrangements for the construction and the final cost of the project.

The NPC official said Areva feels commissioning of the first phase of the project is possible in 2021 if all these issues are settled at the earliest. Jaitapur project opponents, such as the Konkan Bachao Samiti, have estimated a per-unit Mw cost of Rs 38 crore and the per-unit rate of supply at Rs 14.

The say the total project cost works out to a whopping Rs 376,200 crore.NPC officials have said the project cost would be finalised after its talks with Areva conclude.