Areva seeks help of French govt on cost sharing for Jaitapur project in Maharashtra


Sanjay Jog  |  Mumbai  June 16, 2013 , BS

NPC insists that per unit tariff be equivalent to new coal based project during phase I commissioning

In a major breakthrough, Areva, which proposes to initially supply two evolutionary pressurized reactors (EPRs) of 1,650 MW each for Jaitapur nuclear project in Maharashtra, has sought the intervention of treasury officials of France government and banks to find a way out to address the issue of cost sharing. While the Department of Atomic Energy (DAE) and Nuclear Power Corporation, which is a project developer, are emphasizing the need for higher level of indigenization or localization, the French reactor supplier Areva does not want to reduce its share on supply of reactors and components by admitting to increased burden.
Areva spelt out its move to refer cost sharing issue with treasury officials of the French government and lenders during its recent meeting held in France on June 5 & 6 with a high level Indian team consisted of Dr CBS Venkataraman, additional secretary, Department of Atomic Energy (DAE), Preman Dinaraj, director (finance), Nuclear Power Corporation and Sandeep Singhroy, Jaitapur project director. This is also important when DAE and NPC want the Centre’s intervention to provide a special package to share increased cost burden.
When contacted Areva officials declined to make any comment.
However, NPC official, who did not want to be identified, told Business Standard “Areva has indicated that capital cost per megawatt will be Rs 24-25 crore in the changed circumstances while we are insisting on Rs 12-14 crore. We are aware that Areva will not accept any compromise on its copyrights. However, we expect Areva to cooperate by accepting higher level of localization in order to reduce the capital cost. During the signing of inter governmental agreement between India and France in December 2010, NPC had projected the per unit tariff of Jaitapur project at the time of commissioning in 2017-18 will be equivalent to the per unit tariff of newly commissioned coal based power project in the country. This was estimated in the range of Rs 4 to 7 per unit depending on the nature of the boiler, turbine and generator used in new coal based power project in the country.”
NPC official admitted that the situation has changed as the cost escalation is quite imminent in view of the incorporation of additional safety applications necessitated after the safety review held globally following the Fukushima nuclear accident took place in Japan in March 2011.
NPC hoped that Areva’s move to seek the opinion of treasury officials of the company and lenders may give a necessary push for ongoing negotiations. It is also significant when Areva and NPC are unable to sign the commercial agreement for the Jaitapur project and resolve contentious issues with regard to India’s Civil Liability for Nuclear Damages Bill, credit arrangements for the construction and the final cost of the Jaitapur project. The official informed that Areva has indicated that the commissioning of first phase can be possible in 2021 if all these issues are settled at the earliest.
Meanwhile, Jaitapur project opponents including Konkan Bachao Samiti have estimated a per unit megawatt cost of Rs 38 crore and the per unit tariff of Rs 14. According to them, the total project cost works out to be a whopping Rs 3,76,200 crore. However, NPC officials have said that the project cost will be finalized only after its talks with Areva are concluded.

 

2 Comments (+add yours?)

  1. Trackback: Repeating Enron in Jaitapur- Miscalculations of the cost of energy from Jaitapur will cost #India | kracktivist
  2. Trackback: Areva seeks help of French govt on cost sharing for Jaitapur project in Maharashtra | kracktivist | Intercultural Resources

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