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.

 

French minister wants Mittal out of France


Tue, Nov 27, 2012 at 01:06

FRANCE-ARCELOR-LAKSHMI-MITTAL:French minister wants Mittal out of France

By Nicholas Vinocur and Yann Le Guernigou, moneycontrol.com
PARIS (Reuters) – Steelmaker Mittal, which acquired France’s Arcelor in 2006, is no longer wanted in France due to years of broken promises, Industry Minister Arnaud Montebourg said on Monday, intensifying a row over plans to close two furnaces in northeastern France.

Montebourg’s attack on ArcelorMittal, which he later qualified, risks exacerbating tensions in a dispute that is central to Socialist President Francois Hollande‘s efforts to save jobs and reverse years of industrial decline.

It came after Montebourg, one of the most left-wing ministers in the government, said last week France could nationalise the company’s Florange site on a temporary basis while the government tries to find a buyer.

ArcelorMittal, the world’s largest steelmaker, has said it will shut down two blast furnaces at Florange from December 1 unless the government can find a buyer to operate them.

“We no longer want Mittal in France because they haven’t respected France,” Montebourg said in an interview with Les Echos business daily published on Monday.

He said Chief Executive Lakshmi Mittal had told “shameful lies” since 2006 about the group’s plans and had not kept his promises to the French government.

“The problem with the blast furnaces at Florange is not the blast furnaces at Florange, it’s Mittal,” he said.

A source close to Indian-born Lakshmi Mittal, who according to French media is due to meet with Hollande on Tuesday, told Reuters that management were “very shocked” at Montebourg’s words.

“These are quite violent declarations against a company which employs 20,000 people in France,” the source said.

BACK-PEDALLING

Qualifying his statement later on Twitter, Montebourg said in a message that while ArcelorMittal’s methods were questionable, the group would continue to operate in France, where it has more than 100 industrial sites.

Montebourg’s back-pedalling was part of a pattern for the outspoken minister, who previously embarrassed the government by saying it would not allow Peugeot PSA <peup.pa>to close a plant near Paris, only to retract the pledge.

Libya‘s sovereign investment fund, which Montebourg said in November was interested in acquiring a Petroplus refinery in northern France, denied on Monday having expressed interest in the refinery, according to Libya’s Lana news agency.

The fate of Florange, situated in the former heart of French steel making country, became a symbol of France’s flagging industry during campaigning for the May election and is now a test of Hollande’s promise to reverse the decline.

Failure to save jobs at Florange would add to a list of industrial shutdowns, including Peugeot PSA’s production site, and risks deepening fears in the public that the government is powerless to save jobs.

Unemployment is at a 13-year high of over 10 percent and October jobless claims due on Tuesday are expected to show another increase.

A spokeswoman for Montebourg was not immediately available to comment. ArcelorMittal, which employs some 20,000 people across France, declined to comment.

Last week, Montebourg said the government had received two offers from buyers interested in acquiring more than just the two blast furnaces, but gave no further details.

ArcelorMittal has denied having received any such offers.

A source close to the company said plans to shut down blast furnaces including those at Florange pre-dated the merger between Arcelor and Mittal, which had never promised to keep the site operating when it signed the deal in 2006.

 

(Editing by Catherine Bremer and Sophie Hares)

 

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