Areva-NPCIL talks on Jaitapur plant stuck

Nuclear Power Corporation of India Ltd (NPCIL) and French conglomerate Areva won’t be able to exchange documents for the final works contract on the supply of two evolutionary pressurised reactors (EPRs) for the Jaitapur nuclear project in the presence of visiting French President François Hollande on Friday.

Negotiations between the two for the initial supply of two EPRs of 1,650 Mw each for the proposed 9,900-Mw project in Maharashtra have been stuck over cost and tariff.

“Talks are still on. The signing of the final works contract will still need further time, as both parties will have to arrive at a consensus on crucial factors such as cost of supply of the initial two EPRs and subsequently, four more for the Jaitapur project,” an NPCIL official told Business Standard.

The official, however, said a small contract similar to an early works contract could be signed with Areva on Friday. He reiterated it would not be a final works contract.

Areva officials declined to comment on the issue but said talks were underway.

As reported by Business Standard, Areva’s team, headed by vice-president Yves Lintz has been in Mumbai for talks with NPCIL since February 5.

NPCIL and Areva have been holding negotiations since the early works contract between the two was signed in December 2010. This was possible as India and France had struck an inter-governmental civil nuclear deal.

NPCIL had estimated the Jaitapur project’s cost at Rs 1 lakh crore and a per unit tariff of Rs 3.40 to Rs 3.50. Areva has indicated French banks and financial institutions would be roped in to provide a long-term loan at competitive rates.

Besides, Areva had also initiated talks with Indian manufacturers to achieve production and supply of EPRs locally instead of its 100 per cent imports from France in a bid to contain cost.

However, NPCIL officials said negotiations with Areva practically came to a halt after the Fukushima disaster took place in March 2011. Subsequently, French regulators asked Areva to revisit safety and security applications and incorporate more to tackle a Fukushima-like accident in the future.

On the other hand, the Atomic Energy Regulatory Board (AERB) also instituted an inquiry into safety aspects. At the same time, NPCIL also completed its internal exercise through the formation of six separate working groups who revisited the safety and security applications in existing nuclear power plants and also relooked into the EPR safety arrangements.

“The incorporation of additional safety applications will have its bearing on cost and its impact on tariff. There won't be any compromise on safety and therefore, NPCIL and Areva are still negotiating to arrive at a consensus,” the official informed. He said the Centre's intervention can be sought to subsidise the hike in the cost of supply so that tariff remains competitive.