Q&A: S K Jain, CMD, Nuclear Power Corp

The state-run Nuclear Power Corporation (NPCIL) says the recent passage of the nuclear liability bill was crucial for atomic power capacity addition. Chairman and managing director S K JAIN speaks to Sanjay Jog on the issues. Edited excerpts:

Why was passage of the civil nuclear liability Bill considered so key?

It was necessary when the country is embarking on large expansion of nuclear power, as it fixes the multi-technology operator’s liability to pay prompt compensation in the unlikely possibility of a nuclear accident.

There will be a defined mechanism for prompt payment, unlike the Bhopal (gas) victims, who had to run from pillar to post. As I see it, it will sensitise nuclear power plant personnel further on safety measures.Actually, a nuclear accident is a remote possibility. The current reactor designs employ passive safety systems and are based on the principles of natural laws. Therefore, operation of these systems do not require any human intervention.

There is an impression that domestic and global suppliers may think twice before taking any investment decisions for India due to the liability provisions? 

There were these apprehensions, on being put in uncharted domain due to unlimited liability. There are more than 200 suppliers associated with the nuclear power plant supply chain, supplying components and systems from a few lakhs to several crores of rupees. We are convincing them. I am confident the expansion of nuclear power programme will continue unhindered, business as usual. The liability Act will not be a major issue in finalising the agreements with foreign suppliers.

Will NPCIL’s plans alter due to the Bill’s provisions? What are your capacity and mobilisation plans? 

Currently, there are 19 nuclear power reactors with an installed capacity of 4,560 Mw in operation. There are four reactors in an advanced stage of construction. These reactors, on progressive completion, will raise the installed power capacity to 7,280 Mw by 2012. The Government of India’s vision is to reach nuclear power capacity of 63,000 Mw by the year 2032.

The indigenous 700 Mw PHWRs (pressurised heavy water reactors) will play an important role. Four reactors of 700 Mw, two units each at Kakrapar (Gujarat) and Rawatbhata (Rajasthan),have already been launched. Six more reactors of this type are scheduled to be launched in the next two to three years. This will give a quantum jump in capacity, by 7,000 Mw in the short term.

Of the 63,000 Mw ,the contribution of 1,000 Mw and above LWRs (light water reactors) based on international co-operation is envisaged to be 40,000 Mw. These will be set up in technical cooperation with other countries.

The Government of India in October 2009 has accorded “in principle” approval of five new sites – two inland ones in Haryana and Madhya Pradesh for setting up of 700 Mw PHWRs and three coastal sites in Gujarat, Andhra Pradesh and West Bengal for setting up of LWRs. In addition the expansion of earlier approved sites at Kudankulam (Tamil Nadu) and Jaitapur (Maharashtra) sites to exploit their full potential has also been approved. The completion cost of nuclear power projects at the current prices is Rs 8–9 crore per Mw. Financing for setting up of reactors will not be an issue.

NPCIL has not drawn any budgetary support for the past few years. It has accrued its own reserves over time. The projects are being implemented on a dept to equity ratio of 70:30. NPCIL has taken initiatives to broaden its equity base by entering into joint ventures with other organisations like NTPC, IOC, Nalco, etc.

We are also in discussions with Power Finance Corporation, Railways, national and international financial organisations and banking sectors for raising debt funding. With the liability Bill’s implementation, these plans will go ahead.