Pvt sector will have to wait for nuclear pie: Jairam Ramesh

Written by Sanjay Jog | Mumbai | Updated: Feb 15 2009, 06:11am hrs
The private sector, which came up with impressive plans to cash in on the prospective Rs 90,000-crore nuclear power market in India, may just have to take a backseat for now. According to minister of state for power and commerce Jairam Ramesh, public sector majors NPCIL and NTPC are better positioned to make most of the promises and the private players would have to wait longer.

The likes of Tata Power, Reliance Power, JSW, GMR, Lanco and Videocon will practically have no role in increasing Indias nuclear generation capacity to over 20,000 mw by 2020 from the current level of 4,120 mw, said Ramesh on Saturday.

Interestingly, after the signing of India-US civil nuclear deal, Tata Power had proposed to generate 2,200-3,400 mw of nuclear power with an investment of $3 billion. Similarly, Reliance Power, which has hired former NPCIL CMD VK Chaturvedi, had announced its plan to invest Rs 20,000 crore in the nuclear sector. Moreover, GMR had planned an investment of Rs 10,000 crore to set up a nuclear plant with capacity of 2,000 mw to 3,000 mw. Besides, Sajan Jindal-owned JSW, Lanco Infratech and Videocon had also announced their intentions to foray into the nuclear sector.

However, the minister categorically said, There is a need for consolidation either through NPCIL or may be through other JV. NPCIL and NTPC in particular have cash flows, strong financials and borrowing plans even in this meltdown and thus in the next ten years they will be the major contributors in the nuclear capacity addition of 20,000 mw which may even increase to 30,000 mw largely indigenously. I do not see any immediate prospects for private sector.

Besides, the Centre has yet to amend the Atomic Energy Act, 1962 and there is also no legislation on civil nuclear liability or insurance coverage of comparable scope.

Ramesh was speaking after an MoU was signed between NPCIL and NTPC to incorporate a joint venture for setting up two nuclear power plants with a total capacity of 2,000 mw entailing an investment of Rs 15,000 crore. As per the agreement, the joint venture will have 51:49 share holding between NPCIL and NTPC. The proposed capacity addition will be done on 70:30 debt equity ratio. An equity of Rs 5,000 crore will come from NPCIL and NTPC and the balance will be debt.