Nuclear law casts doubt on EDF’s Indian takeover

02 February 2016, Week 04, Issue 342

India’s controversial liability law might still thwart a new attempt to kick-start the country’s stalled nuclear power programme with the takeover of a 9,900 MW development by France’s EDF from Areva, reports said.

EDF last week signed a new preliminary agreement with the Nuclear Power Corporation of India Limited (NPCIL) to try to pick up the pieces of a failed Indian deal with Areva.

Areva first struck a multi-billion dollar agreement with NPCIL in 2009 to build six nuclear plants of 1,650 MW each at Jaitapur south of Mumbai on the west coast in Maharasthra State.

A combination of local public opposition, cost disputes and an Indian law that makes nuclear plant developers liable in the event of an accident prevented progress by Areva, said Indian business news site Quartz.

EDF, like Areva, is majority owned by the French government and Quartz said the switch in developers was agreed with India’s Prime Minister Narendra Modi during a visit to New Delhi by France’s President Francois Hollande last week.

EDF said in a statement it aimed to conclude technical negotiations with NPCIL by the end of this year and begin site work in early 2017.

However, no mention was made of India liability law which was the reason why General Electric (GE) of the United States withdrew from a nuclear plant development plan last September, Quartz said.

The world had an accepted system of liability and it was unreasonable of India to try to re-invent the global rules, Quartz quoted GE’s chief executive Jeffrey Immelt saying.

India is falling far short of a targetted 17,400 MW of nuclear powered capacity by 2017. At present, 21 reactors have an installed capacity of 5,780 MW.

“Much of [the shortfall] is due to a lack of interest from foreign reactor makers, who have objected to a law that holds manufacturers liable in case of an accident,” Quartz said.

Safety concerns and cost viability were two lingering concerns that promise to continue to plague the Jaitapur plans, the Indian Express said.

Costs quoted in Indian media range from US$9.4 billion to US$17 billion. 

Edited by

Richard Lockhart

Editor

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