Bill to open N-business to private sector soon

Written by Anupama Airy | Vikas Dhoot | New Delhi, Sep 16 | Updated: Sep 17 2008, 06:35am hrs
India is set to amend the Atomic Energy Act, 1962, to allow the entry of private players in the generation of nuclear power. The Manmohan Singh administration is working overtime to bring an amendment to this effect through a Bill in the upcoming session of Parliament. The Bill will also include allowing FDI in nuclear power generation.

According to officials, western governments want India to bring in these changes before US Congress takes up the 123 Agreement for ratification. The US, along with Russia and France, are expected to be key fuel and technology suppliers for Indias nuclear power programme. India is likely to procure two nuclear reactors with a capacity of 1,000 mw each from the US and at least one each from Russia and France.

In Russia, the nuclear power business is under the control of the State and, therefore, any nuclear collaboration will be a matter between the two governments. India has already signed an MoU with Russia and a formal agreement to this effect is expected to be signed soon.

When it comes to France, the situation is more nuanced. Areva, the countrys dominant power sector player, is from the private sector. But the French government has a major say in its nuclear power business. France has the highest number of nuclear power reactors in the world and has been engaging with India in the past.

However, in the US, the nuclear power business is totally in the private sector with players like General Electric and Westinghouse, even though there are strict nuclear safeguards overseen by the government. For these companies to operate in India, like picking up equity in private players here, changes to Indian law are imperative.

For India, too, the changes are necessary, as the government alone will find it difficult to finance the huge expenditure required to set up nuclear plants. Indian private players like the Tatas, the Anil Dhirubhai Ambani Groups Reliance Infrastructure and the GVK group are keen to participate in nuclear power generation in a big way.

Indias nuclear power business is currently controlled by the two public sector companies under the department of atomic energy: Nuclear Power Corporation of India Ltd (NPCIL) and Bharatiya Nabhikiya Vidyut Nigam, which was formed in 2003 to construct fast-breeder nuclear reactors. NPCIL currently operates 14 nuclear power stations of different capacities across the country.

Commerce & industry minister Kamal Nath said on Tuesday that the issue of public and private sectors in nuclear power is irrelevant. We have to do what is good for the country. Power generation is already in the private sector. Once the modalities for private companies to participate in the nuclear power business are put in place, I dont think there should be a problem (for private players to set up shop and bring in FDI).

Nath was speaking after a meeting with Frances trade minister, Anne-Marie Idrac, who said France welcomes the NSGs waiver for India and wants to be a key player in Indias nuclear power plans, which it hopes would begin as soon as possible.

India has an installed capacity of 4,000 mw from 17 nuclear power stations, of which only 1,950 mw is operational.

Resumption of fuel supplies will be used to bring the existing plants up to full capacity utilisation. Around 3,160 mw of additional capacity is under various stages of construction at the Rawatbhata station in Rajasthan (2x220 mw), Kaiga (220 mw) and at Koodankulam in Tamil Nadu.