In 2010, India and France signed an agreement for setting up a nuclear power plant at Jaitapur in Maharashtra. Since then, the project is mired in controversy. The project cost, in the meanwhile, has escalated. French energy major Areva SA has been negotiating with Nuclear Power Corporation of India Ltd. (NPCIL) and the Department of Atomic Energy (DAE) to supply and build reactors for the plant. Tarik Choho, Chief Commercial Executive Officer, Areva SA, was in India recently to meet NPCIL officials to take the talks forward. Excerpts from an interview with The Hindu:
You have been negotiating with NPCIL to build reactors for the proposed nuclear power plant at Jaitapur. What is the progress?
I think you should address this to NPCIL. We hear that there is some progress on the land acquisition front. We are not in the front line. NPCIL and the DAE are having all discussions. At present, we are getting into agreement on the price for the first two reactors. In 2010, we were in agreement that the project would be viable with a price per kilo watt hour produced at Rs.4. That time the investment was on different parameters.
Since then, we have improved our offer, which is the Areva part of the project (40 per cent of the total budgeted cost). We have improved that portion by commercial efforts and by transferring some of the scope of work that was initially planned to be done in France. That portion will now be done in India. We were informed by NPCIL and the DAE that their calculation now showed higher pricing for per kilo watt hour. We know that the exchange rate of the rupee versus euro has dropped. So, this does not help when you have a project that is calculated in euros. We understand this is not the only parameter that has impacted this calculation. So, one of the objectives is to go back to France and understand the calculation that NPCIL and the DAE are doing to get into this tariff.
Our objective is really to work together to understand what parameters can be changed and what actions can be taken to improve different parameters, not just the capital expenditure but operating cost. Parameters have significant influence on the final result on the rupee per kilo watt hour.
What is the rate NPCIL and the DAE are talking about?
They are saying that their calculation shows that today we are around Rs.9 per kilo watt hour and I believe the target of the DAE and NPCIL is to bring it down to Rs.6.5. And our goal is to understand these two numbers. Once we understand this, we will try to close the gap.
NPCIL is the owner of the project and you will only be the technology supplier. If the project cost goes up due to some reason, how are you bothered?
There are two aspects here. Our job is to make our part of the cake competitive, efficient and safe. We must also ensure that the project is viable. We can help NPCIL control and reduce the cost of other portions of the project. Financing cost and cost over-run have huge implications on projects and the rupee per kilo watt hour. We can help in financing cost, export credit financing etc. We already have done a lot of work on this project to get through the Rs.4 per kilo watt hour in 2010.
How much work has already been done?
We have not done anything on the ground. In 2010, the plan was to commission the plant in 2017. If it starts now, it will be operational only in 2021.
Where else do you have presence?
In terms of EPR deals, we have one in Finland, one in France and two in China. The U.K. and Brazil are two projects that just got contracted, and we will build two EPRs in the U.K. In Brazil, it is not EPR. We are finishing the reactor construction that started way back. We are also in final stage pf negotiations in Turkey for ACME reactors. Technology has been selected, and we are fine-tuning the terms and conditions. ACME is a 1,100 MW reactor as opposed to EPR which is 1,600 MW. We are discussing with Saudi Arabia, Poland, South Africa, Vietnam, and also in China.
What are your plans for India?
In the nuclear business, it started with the contract for supply of uranium. After Fukushima, there is focus on improving safety of existing reactors operating. We are in discussion to supply safety equipment.
Other than nuclear, we are present in solar energy in India. We have a 125 MW project in Rajasthan. We are setting it up for Reliance Power. We are hoping to build another one for Reliance. We are also discussing with other producers.
We also have activity in biomass in India. We have our office in Chennai for this division. We have 50 people working in this domain. They have already successfully executed five projects in India with a total capacity of 47 MW.
Two biomass projects have been set up in Thailand from here, and we have just signed for a project in the Philippines.
These projects use rice husk as fuel to produce energy. Apart from catering to the requirement of the Indian market, we are exporting biomass plants from here.