BL reported that a proposal to allow private players to set up nuclear projects in the country, envisaged through an amendment to the Atomic Energy Act is likely to be put on the backburner.

Government officials said that the alternative strategy to tide over the paucity of funds and ramp up execution capability for new Light Water Reactor based projects hinges on roping in core sector public sector undertakings and implementing projects through joint ventures with state owned Nuclear Power Corporation of India Ltd.

While a pact with thermal major NTPC Ltd is already in the works and talks are on with both Indian Oil Corporation and National Aluminium Company Ltd, NPCIL has also sounded out other state owned firms. The PSUs will be roped in as junior partners and investors for the joint venture projects on the anvil.

The Atomic Energy Act 1962 requires nuclear power generation to be done by a government company in which at least 51% of shares are held by the Central Government.

Officials said the Act however, enables limited participation of the private sector firms in the manufacture of nuclear equipment and other supply chain activities, including construction.

TATA Power, Reliance Power, JSW, GMR, Lanco and Videocon are among the private players that have announced plans to enter the sector.

The country’s installed nuclear power capacity is 4,120 MW. Of the 20,000 MWe target for 2020, NPCIL which has a surplus of INR 12,000 crore, including cash reserves can manage only about 10,000 MW through its own financial resources. Hence, funding from other sources is needed to supplement NPCIL’s efforts and the best candidates are PSUs, especially those in the core sector with strong financials and cash flows.

The latest Economic Survey had made a strong pitch for amending the Atomic Energy Act to permit private investment in nuclear power. It also prescribed that rules need to be framed for allowing up to 49% FDI in the sector.

(Sourced from Business Line)