With N-deal India hoping for business worth $80 bn3 min read . Updated: 26 Sep 2008, 11:50 AM IST
With N-deal India hoping for business worth $80 bn
With N-deal India hoping for business worth $80 bn
Mumbai: Indian nuclear energy officials say they would like to do business with GE and other US firms. But if they can’t, there’s always France and Russia.
Even as a landmark US-India nuclear accord hangs in limbo in the US Congress, the global gates of nuclear trade with India are now open.
Whether or not US companies get the go-ahead to sell nuclear fuel and technology to India, the country’s nuclear officials are confident they will get their uranium.
“If a deal with Congress doesn’t happen, we will have business with other countries. So simple," said SK Malhotra, a spokesman for India’s Department of Atomic Energy.
India reached nuclear trade agreements with Russia and France in January, though the government has held out on implementing them until a US deal goes forward, said Shreyans Kumar Jain, chairman of India’s state-run Nuclear Power Corp. Ltd., which runs all 17 of the nation’s nuclear reactors.
The agreement before Congress would overturn three decades of US policy by allowing nuclear trade with India, even though India has not signed a global treaty against the spread of nuclear weapons.
The deal enjoys broad support among leaders of both American political parties but, with other priorities on lawmakers’ plates, there’s no certainty it will get the nod before Congress adjourns this month ahead of November elections.
What happens after the nod?
Meeting Thursday in Washington, Indian Prime Minister Manmohan Singh and US President George W Bush expressed hope that Congress will approve the agreement.
Singh was to go on to France, where he was expected to ink India’s nuclear agreement with that country.
American companies worry they could be shut out of the Indian market. General Electric Co. helped build India’s first nuclear reactor in the 1960s, and GE would love to rekindle that relationship.
“It’s a $30 billion-plus market in India. There’s a huge opportunity for a company like GE," said Kishore Jayaraman, regional head of GE operations in India, Sri Lanka, and Bangladesh. “We have been pushing for it."
Today, India gets just 3% of its energy about 4,100 megawatts from nuclear power. By 2032 the government plans to quadruple total generating capacity, to 700 gigawatts, with nuclear accounting for 63,000 megawatts.
That adds up to about 40 new nuclear reactors, worth some $80 billion, according to Jain.
A key limiting factor on India’s nuclear expansion has been access to uranium. Despite an aggressive hunt in basins, thrusts, and folds across the country, known domestic deposits will support only 10,000 megawatts of nuclear capacity.
“All reactors are going to be sourced from foreign vendors and tied to fuel supply agreements," Jain said.
Previously, India was largely unable to buy nuclear fuel and technology from abroad, because of its refusal to sign the Nuclear Nonproliferation Treaty and its testing of atomic weapons.
On 6 September, under heavy lobbying by the United States, the 45-nation Nuclear Suppliers Group made a historic exception for India. That opens the door for nuclear sales to India but, in the US case, Congress must approve.
Jain says Nuclear Power Corp. hopes to finalize contracts with GE, Westinghouse Electric Co., France’s Areva group, and Russia’s Rosatom State Nuclear Energy Corp. to build a first round of eight reactors starting in 2009.
The government, he added, plans to take a 30% equity stake in the new reactors, and borrow to raise the rest.
Rosatom is already helping India build two nuclear reactors, under an agreement that predates Russia joining the Nuclear Suppliers Group.
Areva has been active in pursuing business, with CEO Anne Lauvergeon joining French President Nicolas Sarkozy on his January state visit, according to three Indian officials.
Currently, private companies cannot operate nuclear reactors, but India is separating its civilian and military nuclear programs as part of the US-India nuclear deal. That could pave the way for deeper private sector involvement on the civilian side, Montek Singh Ahluwalia, a top official in India’s Planning Commission, said in a recent interview.
Jain, of the Nuclear Power Corp., said a raft of companies, including the Tata Group, Reliance Power Ltd., GMR Infrastructure Ltd., GVK Industries Ltd., the Essar Group, and the state-run National Thermal Power Corp. have expressed interest in running nuclear power plants in the future.
Parts suppliers and builders, like Hindustan Construction Co., Bharat Heavy Electricals Ltd., Larsen &Toubro Ltd., Gammon India Ltd. and Godrej & Boyce Mfg. Co. Ltd. could also benefit from India’s nuclear build-out.
Deepak Morada, a spokesman for Larsen & Toubro, India’s largest builder, said he thinks the capital and manufacturing requirements needed to help 400 million Indians who now live by candlelight switch on the lights, are simply too massive for the government to handle alone.