After getting a earful about the proposed Areva nuclear reactor from disgruntled farmers in Jaitapur, Union Environment Minister Jairam Ramesh heard a sobering assessment of the Areva's Finnish reactor project — which is running four years behind schedule, with cost overruns hitting 2.7 billion euros — from that country's nuclear regulator.
In a presentation made to Mr. Ramesh and a visiting Indian delegation in Finland earlier this week, Finnish regulator STUK put the blame for the crippling delay on Areva, for taking on the job without the requisite competencies, without experienced partners, and without completing design and engineering work before it started construction.
“In all of the Areva's earlier projects, the owner and licensee of the French nuclear power plants EdF had played the important role as the architect-engineer and had been responsible for the construction management,” The STUK told Mr. Ramesh. “at the start of the project it was found that many of the experienced nuclear manufacturers who had contributed to the earlier Areva projects had left the business. The Areva had to find new subcontractors and to coach them in nuclear manufacturing.”
The Finnish regulator added that the original schedule was “too ambitious” for a nuclear plant that is the first of its kind, larger than any previous project and built after a long gap in nuclear plant construction in Europe.
The presentation prepared by STUK Director-General Jukka Laaksonen, titled “Lessons learnt from the Olkiluoto 3 plant construction for the next projects in Finland” could have lessons for nuclear regulators and operators in India as well.
Opponents of the Jaitapur plant have pointed to the Finnish experience to argue that the Areva cannot be trusted to deliver within schedule and budget and that the project could become the next Enron, producing power that is financially unviable for India.
While the Areva has projected itself in India as a global player with long experience in the nuclear plant business, the Finnish regulator makes it clear that since the French company was dependent on a partner who is no longer available for actual construction, much of that vaunted experience could now be irrelevant.
“In making contracts for construction, one should not underestimate the importance of proven experience from management of large projects,” says the regulator. Only after the Areva's “initially poor performance” did the Stuk realise that the Areva had never taken “direct responsibility” for construction in its earlier projects.
Safety culture
The STUK also notes that the Areva has “not always been successful in managing the supply chain or monitoring the performance beyond its main supplier” adding that suppliers have not been attentive to the required safety culture. That observation could cause concern in the Indian context if the French company plans to use local suppliers for its Jaitapur project.
With regard to safety, the STUK found that Areva “did not fully understand” the safety requirements in the regulatory guides. There were also situations in which the Areva, its manufacturers and the licensee (or future operator) “evidently faced too much economic pressure, and have not been strong enough to take the responsibility for stopping the work and insisting necessary timely corrections.” In those situations, the STUK's “close regulatory oversight” ensured higher quality.
However, the STUK itself has a level of independence and autonomy not guaranteed in the Indian regulatory context. The Finnish regulator is administered by the Ministry of Social Affairs and Health, which has no role in energy policy or industrial development.
In India, the Atomic Energy Regulatory Board (AERB) comes under the Department of Atomic Energy, which is also responsible for encouraging investment in the nuclear power sector, thus causing a conflict of interest. Activists have long been pushing for the AERB to be moved to another Ministry, in the same way that the Commission for Railway Safety functions under the Civil Aviation Ministry rather than the Railways Ministry.
