NPCIL &Areva strive to reach commercial deal for Jaitapur nuclear project

Ahead of French President Francois Hollande’s visit on the occasion of Republic day, the Nuclear Power Corporation of India Ltd (NPCIL) and Areva are striving to close the crucial commercial agreement for the 9,900 Mw Jaitapur nuclear power project in Maharashtra. Initially, Areva will supply two European Pressurized Reactors (EPRs) of 1,650 Mw each for project. The contentious issue continues to be sharing of cost due to the application of additional safety measures following the Fukushima nuclear accident, which took place in March 2011.

The early works contract was signed between NPCIL and Areva in December 2010. Former chairman of the Atomic Energy Commission, R K Sinha, had indicated two years ago that the per unit tariff of Jaitapur project would be Rs 6.50. The project is running behind schedule by at least three-and-a-half years.

Areva India President Manju Gupta said that teams from both sides are working together under the Pre-Engineering Agreement (PEA), signed in April 2015, during PM Narendra Modi’s visit to France.

Gupta told Business Standard, ”Under this frame, Areva is supporting NPCIL in preliminary assessment of EPR licensability in India as per Indian regulations. This important step will also enable both companies to go a step further towards project development. We are also working with a local company, L&T within the framework of an MoU signed in April 2015, to explore areas of collaboration between the two companies. This may include increased localisation for the Jaitapur project and contribute to Prime Minister’s ‘Make in India’ initiative. With the strong commitment from both the sides, we look forward to reaching a common understanding on the viability of the project,” Gupta said.

NPCIL executive, who is involved in the negotiations with Areva, said the technical and commercial talks are currently underway. Efforts are being made to reach at the commercial agreement. As on date necessary technical and regulatory requirements are in place. Infrastructure activities and pre construction works are in progress at the project site.

The additional safety applications include strengthening provision for monitoring of critical parameter under prolonged loss of power, provision of diesel driven pumps for transfer of water, additional mobile pumps and fire tenders and steps for augmentation of onsite water storage, wherever required.

NPCIL’s former chairman and managing director S K Jain said the cost is really subjective because in dollar terms the price which has been quoted by all the foreign suppliers is only marginally higher than what they had quoted in 2005 and 2006.”Marginally higher cost in dollar terms is on account of taking safety of reactors to much higher level. It is unfortunate that dollar which was at that time around Rs 45-48 is now at Rs 67 plus. In dollar terms today also offers by Areva and other reactor suppliers are very attractive,” he noted.