States Cool To Equity Offer In N-Power Project In Tn

Nuclear Power Corporation's offer of equity in the Kudumkulum power project to southern states has found no takers. The 2,000-mw Rs 14,000 crore project in Tamil Nadu is to come up with Russian technology.

The project is facing many hurdles. The US has opposed the proposed sale by Russia of 2x1000 mw pressurised heavy water reactors and technology to India.

Besides, the corporation is finding it hard to arrange funds. Indo-Russian negotiations are reported to be stuck for the past two years on the question of finance, with the Russians demanding a 10 per cent upfront payment in hard currency.

 

The corporation wanted to float a separate company in partnership with the states who would draw power from the southern grid. However, the states have not responded even after a year of the suggestion being made.

Officials said NPC, deviating from the earlier proposal to import the full plant, offered to erect the plant based on Russian technology, critical equipment and components and fuel.

This would have cut the cost by Rs 300 crore. The Russians agreed to this proposal, but insisted on advance payments for technology and equipment.

NPC is a Rs 4,800 crore company, which is in the red largely due to a high interest burden on accumulated loans. With India not signing the nuclear non-proliferation treaty (NPT), the corporation was unable to borrow from international lending institutions on soft rates of interest.

Although the corporation gets budgetary support for ongoing and new projects, most of its borrowings are for short-term working capital requirements.

Its precarious resource position has been aggravated by high outstandings from the various state electricity boards, which stood at Rs 500 crore as in 1995.

Although NPC has the technology for heavy water reactors, it has not been able to upscale its 220-mw technology to 1,000 mw.

This has forced it to buy the reactors from Russia that will be assembled here.

The plant is to become operational five years from the start of the project.

NPC gets a budgetary grant of Rs 500 crore annually, mainly to maintain existing plants and a small provision for new projects.

The corporation has an authorised share capital of Rs 3,500 crore with the subscribed share capital at Rs 2,209 crore. It operates 10 reactor units with a total installed capacity of 1,940 mw, but has always fallen short of targets due to a shutdown for repairs or grid trouble.