The Jaitapur nuclear power project is back on the negotiation table over a year after French utility EDF signed a preliminary agreement to build six reactors.

The renegotiation is because the Nuclear Power Corporation of India Ltd (NPCIL) and EDF are unable to reach a consensus on the project cost. Sources said the EDF has proposed a cost of ₹30 crore per MW for the 9,900 MW capacity.

Project cost

The EDF proposal is higher by ₹10 crore per MW than the average cost of developing the Evolutionary Power Reactor (EPR) technology, sources in the know said, adding that at the EDF-proposed cost, the Jaitapur nuclear power plant will require an investment of ₹ 2.97 lakh crore.

NPCIL is contesting this cost and officials privy to negotiations with EDF told BusinessLine , “There are contentions regarding the tropicalisation of the power plant. The design of the plant will have to be modified once they are settled.”

The project has to undergo modifications to suit the climatic conditions in Maharashtra. These variations have escalated the cost of the project with an operational life of 60 years. While the two agencies are trying to work out the costs, what worries EDF is the regulatory regime in India that will have to approve the higher tariffs resulting from cost escalation. Besides, there will be demands for having a local EPC contractor to fast-track the implementation of project.

Protests and delays

The Jaitapur nuclear power project has been in the works since 2009. After delays due to multiple protests, the project was resuscitated in January 2016 during French President Francois Hollande’s visit to India. In a joint statement on the visit, the two sides agreed on a roadmap of cooperation to speed up discussions on the project.

The statement said, “Their shared aim is to start the implementation of the project in early 2017.”

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