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Nalco pulls out of JV with NPCIL for nuclear power plant in Gujarat

As per the joint venture agreement Nalco would have 26% stake in the new entity, NPCIL-Nalco Power Company


Dillip Satapathy  |  Bhubaneswar 

Image via Shutterstock

Aluminium major has decided to drop its plan to foray into nuclear energy generation. The company had signed a memorandum of understanding (MoU) with Nuclear Power Corporation of India Ltd (NPCIL) in 2012 to set up two units of Kakrapara Atomic Power Station in Gujarat with capacities of 700 Mw each. The cost of the project was estimated at Rs 12,000 crore.

According to the joint venture agreement, would have a 26 per cent stake in the new entity — NPCIL-Power Company.

“We have decided to pull out of the JV with NPCIL following change in technology of the project. Initially, it was decided to build the plant with indigenous technology. But later, it was decided to use foreign technology. The foreign technology will not only be more expensive, the gestation period of the project will also be more and we are in a mood to wait that long with so much of investment exposure,” said Nalco Chairman and Managing Director Tapan Kumar Chand.

He said the Nalco board had already decided to pull out of the project and it would be intimated to NPCIL. The company had run into legal hassles over the project as the nuclear energy generation sector in the country was restricted to a couple of fully-owned subsidiaries of the Department of Atomic Energy.

NPCIL and Bharatiya Nabhikiya Vidyut Nigam are the two government of India-owned authorised to set up nuclear power plants in the country. They are responsible for design, construction, commissioning and operation of thermal nuclear power plants.

Although NPCIL was keen to involve other public sector firms such as Nalco, Indian Oil Corporation, and NTPC with whom it has signed MoUs, to expand its nuclear power footprint in the country, the existing Act did not allow this.

The Atomic Energy Act, framed in 1962, also prohibited private control of nuclear power generation, though it allows them minority investment.

Notwithstanding its unsuccessful bid to foray into nuclear energy, Nalco has identified renewable energy as its next focus area. “We have set up wind mills in Andhra Pradesh (50.4 Mw) and Jaisalmer, Rajasthan (47.6 Mw). We plan to set up more wind power mills in Rajasthan and Maharashtra (50 Mw each) and a 20 Mw solar power plant in Madhya Pradesh. We are also in the processing of installing a 14-Mw wind power mill at Damanjodi,” said Chand.

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First Published: Mon, May 30 2016. 00:37 IST