Bill brouhaha fails to stop NPCIL-Areva pact

Expect to enter into technical pact within a month for supply of two reactors for Maharashtra project.

Amid political debate on the controversial civil nuclear liability Bill, the state-run Nuclear Power Corporation (NPCIL) today said it hoped to sign an agreement with French power equipment maker Areva in a month for supplying two European pressurized reactors (EPRs) of 1,650 Mw each for proposed 10,000-Mw project in Maharashtra.

Both companies are currently engaged in the last leg of negotiations which aim at substantially bringing down the per megawatt (Mw) capital cost to Rs 10 crore per Mw, from the present level of Rs 20 crore per Mw with emphasis on indigenous supply. This is to achieve a competitive rate of Rs 4 per unit. NPCIL still believes the actual ground breaking would be possible for each EPR by the end of this year or early 2011.

An NPCIL official, who did not want to be quoted, told Business Standard: “Despite the ongoing debate over the Civil Nuclear Liability Bill, there is no hitch for either NPCIL or Areva to close the technical agreement for the supply of the two EPRs. The focus is given on the indigenisation of manufacturing, design and manpower. Areva is currently involved in talks with Indian manufacturers who will ultimately be roped in to design and produce necessary components of the reactors in the country. Local talent will be also pooled.”

The official said on the basis of the provisions of the proposed technical agreement, everybody would share the responsibility.

He admitted it was for the first time that India was going in for EPRs which are currently in place in France. “Ongoing negotiations are looking at each minute details. Subsequently, NPCIL and Areva will enter into a financial agreement. With the localisation of indigenisation, the financing will change,” the official said.

Areva declined to comment on the grounds that it was an ongoing process.

Initially, based on a capital cost of Rs 20 crore per Mw, NPCIL had estimated an investment of Rs 2 lakh crore for 10,000 Mw (six units of 1,650 Mw each) over 12-15 years. However, with the capital cost halved to Rs 10 crore per Mw, the company would need Rs 1 lakh crore, which would be raised through multiple instruments including internal accruals, external credit assistance (ECA) from French banks as well as from Indian banks and financial institutions. ECA is expected to come from a consortium of five French banks including BNP Paribas, Societe Generale, HSBC, Calyon and Natixis.