Centre Unclear On Nuclear

Mr Y.S.R. Prasad, managing director of Nuclear Power Corporation, in a chat with Business Standard, delves in to the governments policy on the nuclear energy developmental activities and the present cash crunch situation stifling the corporation

How do you react to the recent Rs 2,300 crore financial irregularities reported in Nuclear Power Corporation?

It was the Union Cabinet, which approved this amount (approx around Rs 1,800 crore) for purchasing long-term critical nuclear power plant equipment on a large scale. These are equipment, which had to be procured much in advance before the work in the project site starts. As the Centres budgetary sanctions decreased drastically, the Department of Atomic Energy (DAE) cut short its earlier target of 10,000 MW by 2000 AD to around 3,340 MW.

As a result, these equipment were left unused. Around Rs 1,511 crore worth equipment were purchased during 1986-91.

What are the major problems faced by the NPC?

To begin with, the immediate problem is that of funds. Since nuclear sector is directly associated with the nations defence, no foreign country is ready to lend. So the scope of raising money from overseas financial markets is ruled out (external commercial borrowings). When the corporation was formed as a separate commercial entity in 1987, the centre had agreed in all projects with a debt is to equity component ration of 1:1. But, the budgetary support from the government registered a declining trend during the preceding years. As a result, NPC was forced to take money from the capital markets which literally resulted in pushing up the interest factor. Eventually the nuclear projects reached a stage where the debt factor doubled to 2:1.

Apart from this, the corporation has not received several crore of rupees as arrears from the cash-strapped state electricity boards (SEBs). We have represented the centre to adjust the due amount under its central plan assistance of each state.

Despite all these woes, the centre is tight-lipped to the NPCs plea of revising the tariff rate structure of electricity. It seems the government of India needs free power supply; and at the same time is succumbing to multinationals like Enron etc.

How do you plan to respond to these emerging issues?