Will Jaitapur project cost go up like the Flamanville?

EDF SA's decision to hike the cost of evolutionary pressurised reactors (EPR) to over $11 billion for the Flamanville nuclear project in France has triggered a debate over a similar hike by Areva SA, another French firm, for the two EPRs it will supply to the Jaitapur nuclear project in Maharashtra.

Those who spearhead the campaign against the proposed 9,900-Mw Jaitapur project claim the Jaitapur project cost and the per unit tariff are bound to increase, following the Flamanville way.

They expect the state-run Nuclear Power Corp of India Ltd (NPCIL) to provide clarity in this regard.

“Jaitapur will have same EPRs to be supplied by Areva. In view of EDF’s move, the per megawatt cost for the Jaitapur project works out to be Rs 38.19 crore and the total cost at Rs 3.78 lakh crore,” Anil Gachke, a senior representative of Swadeshi Jagran Manch (SJM), said.

 

SJM, which has close links with the Rashtriya Swayamsevak Sangh, is in the forefront of the campaign against the Jaitapur project.

Two years ago, NPCIL had estimated the Jaitapur project cost to be at Rs 1 lakh crore and had estimated per unit tariff at around Rs 3.30.

Stricter regulation in the wake of the Fukushima nuclear disaster contributed to bringing the total cost of the 1,600-Mw Flamanville European pressurised reactor to ^8.5 billion ($11.11 billion), the EDF group said on December 3. In 2005, the state-owned utility estimated the reactor's cost at ^3.3 billion.

NPCIL and Areva are currently engaged in negotiations to enter into the final works contract after India and France signed an inter-government civil nuclear agreement in December 2010.

However, after the Fukushima accident in March 2011 and the subsequent reports by French and Indian atomic energy regulators suggesting upgrade of safety in EPRs, the tone and tenor of negotiations got changed.

NPCIL chairman and managing director K C Purohit said he had not received any official communication on EDF’s move to increase the EPR cost. He told Business Standard: “I am not aware of any such move. As far as NPCIL’s talks with Areva on the supply of EPRs for the Jaitapur project are concerned, they are in progress.”

Areva India chairman Arthur DE Montalembert said: “As you know, Areva does not comment about on-going discussions with its customers.”

On the EPR cost, Montalembert referred to a statement issued by Areva, which said: “Following EDF’s announcement of the cost increase at the completion of the Flamanville 3 EPR reactor, Areva wishes to point out that this cost is not representative of the price of an EPR reactor in the series offered in the market today."