History has been made and India has got an entry into the nuclear club. So how does this benefit India Inc? That’s the biggest question playing in the minds of all and the market has infact even started celebrating, as though the deal has opened up an “Alibaba’s cave”!
ü First and foremost, to allow private sector participation, the Government has to work on getting the Parliament to amend the Atomic Energy Act under which all activities in the nuclear field remain the domain of government entities. Currently, the private sector can supply equipment, even those as crucial as the nuclear reactor vessel, but the power plant can be operated only by a Government-controlled entity such as the Nuclear Power Corporation.
ü If the Atomic Energy Bill is amended, private sector participation would help India achieve its target of 60,000 MW, entailing investment of Rs 600,000 crore, since each MW of nuclear power costs about Rs.10 crore.
ü Given the low cost of production in India, vis-à-vis the developed countries, India is likely to emerge as the “nuclear hub” for the world, where local companies would form alliances with global companies for supply of various nuclear components and reactors.
ü The deal will enable India to get nuclear fuel for its reactors, which have been running at almost half their capacity
ü The biggest opportunity could come from the US but for this to happen, US based nuclear firms would have to wait for the clearance of the deal by the US Congress to commence trade with India. And once that happens, GE would be one of the biggest gainers as it already has a JV with Hitachi and it would be using this JV to enter India. It would also look for tie-ups with Indian companies as its strength lies in technology.
ü Currently in India, all nuclear power, which comes under the Government of India is run by Nuclear Power Corporation of India Ltd (NPCIL). It means it has a monopoly in India and it has already identified four reactor manufacturers — Westinghouse Electric Company, GE-Hitachi, Areva and the Russia’s atomic energy agency Rosatom. This is based on “suitability” of technical parameters for placement of orders that will form the first phase of the Centre’s plan to build 40,000 MW of nuclear capacity by 2020.
ü NPCIL hopes to set up “Nuclear Parks” or reactor clusters, which would house around 8 reactors of 1,000MW each. The orders would initially be placed for around two reactors of 1,000 MW at each of the locations, following which more reactors could be added. It has identified four coastal sites across Gujarat, Andhra Pradesh, Orissa and West Bengal.
ü Foreign reactor suppliers are unlikely to be allowed to own equity in the projects in the first phase.
ü This entry of India into the nuclear club bodes well not just for the country but also for other countries. Russia has offered India to invest in its upcoming international uranium enrichment centre in, Siberia, in lieu of paying for nuclear fuel to be supplied to the Koodankulam nuclear station. French company Areva NP (a JV between Areva and Siemens), Russian company Rosatom, USA’s GE, Toshiba Corporation, Westinghouse Electric Co would soon start queuing up for a bite into the succulent nuclear pie of India. Then there are the uranium supplying countries – Kazakh and Canada which are also eager to do business with India. Australia will supply uranium to India only if it signs the NPT.
NB:I have compiled this article