It’s back to the drawing board for the six nuclear plants worth about $20 billion that U.S.-based Westinghouse hoped to build in India following the Indo-U.S. civil nuclear co-operation deal.
Westinghouse will need to re-negotiate its pact with Nuclear Power Corporation of India Limited or NPCIL and work out a new business model for its India plans, said sources aware of the development.
While Westinghouse is going through a bankruptcy procedure announced by its Japanese parent Toshiba, the source said that the company is confident that most aspects of its operations in the United States are profitable, if the market is walled-off from ‘problem areas.’
“What this means is that they need to negotiate a new business model — moving away from its original plan to construct the first two nuclear reactors for India itself,” the source pointed out.
Westinghouse is working out a new model with its lenders under which they will design the reactor and provide consultations, but Indian companies would be entrusted with the actual construction of the plant. A process is underway to ascertain who will do what in the new business model and which Indian companies could be involved.
“The aspiration is that the new model will be worked out and the plan will be back on track by next year, but the timeline is flexible as the deal has been so long in the making already,” the source said.
The U.S. Exim Bank that was to finance the six nuclear plants in India, would still play a role in the new arrangement, the source said. The joint statement issued after Prime Minister Narendra Modi’s meeting with U.S. President Donald Trump only has a reference to “related project financing” in this context.