If wishes were horses, NPCIL's would be a power dream

If wishes were horses, NPCIL's would be a power dream
D.N. MOORTY

On March 18, Prime Minister Atal Behari Vajpayee spent nearly a whole day at Rawatbhata where two of the oldest and two of the latest pressurised heavy water reactors (PHWR) in the world are located. He was there to dedicate units 3 & 4 of the Rajasthan Atomic Power Station (RAPS) to the nation. For RAPS staff it was a proud moment, as it was for V.K. Chaturvedi, chairman and managing director of Nuclear Power Corporation of India Limited (NPCIL) and station director K.P. Ojha.

Besides the festivity and the rejoicing, what made the event singular was a dream that was sought to be sold by Chaturvedi, on the one hand and on the other the naivete of the Rajasthan leaders assembled on the stage, Governor Anshuman Singh including, who all honestly seemed to believe that Chaturvedi’s dream was realisable before the end of the decade.

Chaturvedi told Vajpayee that NPCIL had made great strides in extending the life of units 1 & 2, the oldest surviving PHWRs anywhere in the world, by another 25 years. He pointed out that units 3 & 4 were state-of-the-art indigenously designed PHWRs and took pride in asserting that, given the fact that these milestones were achieved in the face of sanctions after Pokhran 1, India was second to none at least in PHWR technology. He added, and here is the crunch, that NPCIL was ready now to build 4 more reactors (RAPS 5,6,7 & 8), each of 540 Mwe the existing four have a combined electricity production of 750 Mwe in a bid to add 2160 Mwe to the northern grid by the end of the decade. He wanted these projects to be sanctioned for the 10th Five Year Plan itself beginning April 2002.

Governor Singh, Rajasthan’s finance minister, substituting for Chief Minister Ashok Gehlot who was away attending the Congress session at Bangalore and Vijaya Raje, all made an impassioned plea that budgetary provision should be made within the framework of the Tenth Plan. Vajpayee, without making any specific commitment, merely said the government would support efforts to increase the share of nuclear power.

Stranger still was Central Power Minister Suresh Prabhu’s testimony. He said India required an annual addition of 10,000 Mwe of electricity, given the projection of India’s requirement of about 2,25,000 Mwe by the year 2020. Prabhu said despite abundance of coal the target could not be met by coal-based thermal projects alone. He talked of concentrating on hydel power projects currently at 24 per cent of the total electricity production but wanted, like Abdul Kalam in his recent demand at a Tarapur function, the NPCIL to double its target from 1000 Mwe to 2000 Mwe per year.

Not a single speaker addressed the central problem: where was the money going to come from? Chaturvedi told the prime minister, that NPCIL sought budgetary support for the various projects only till the end of the 11th Five Year Plan, meaning the Centre should allot the necessary funds for 10 more years, i.e. till the end of 2012, by which time NPCIL would be able to stand on its own feet and be able to add 1000 Mwe every year to the Nation’s power grid, nay, perhaps even 2000 Mwe annually, as Prabhu and Kalam wanted.

Chaturvedi believes in maintaining a high visible profile and is reputed to be as good a human resources manager as he is at nuclear engineering and maintenance and running of nuclear power plants. But his estimate placing the cost of production of 1 Mwe of nuclear electricity at Rs 5 crore does not seem to jell with reality. A former CMD of NPCIL considers this to be unrealistic since it does not take into account price escalations of various inputs. He puts the cost as being closer to Rs 6 crore for Mwe.

The truth may lie still above that figure. For example, RAPS 3 & 4, according to NPCIL’s own published figures cost Rs 2511 crore. This works out to 5.7 cr for Mwe. The Kudankulam project is estimated to cost around Rs 15,000 cr at current prices for 2000 Mwe, which means the cost per Mwe works out to 7.5 crore. Taking into account escalation of prices, a Mwe of future power could cost as much as Rs 9 cr.

Now, the NPCIL has chalked out a plan to add 5940 Mwe to the national grid by the year 2008. Of these only 2x500 Mwe plants are under construction at Tarapur in Maharashtra, and the rest 4940 Mwe are yet to be sanctioned by the Central Government. The break-up is as follows: 4x500 Mwe PHWRs at RAPS, 2x220 Mwe PHWRs at Kaiga, Karnataka, 1x500 PFBR at Kalpakkam and 2x2000 PWRs at Kudankulam in Tamil Nadu.

To achieve this, the NPCIL would need, at Chaturvedi’s conservative estimate of Rs 5 cr per Mwe, some Rs 29,700 crore and this has to be raised within the tenth and the eleventh plan periods. Posit this against the history of plan allotments for nuclear power: In the eighth and the ninth plans the budgetary support amounted to Rs 3748 and 5498 cr respectively. Assuming, that this amount will be doubled during the tenth and eleventh plans, the most optimistic estimate would be Rs 18,000 cr, and the NPCIL would have to go in for borrowing the rest of the about 12,000 crore required. Match this against the borrowings NPCIL could manage in 13 years between 1987 and 2000: a total of Rs 4,225 cr only and that through central government bonds taken mostly by nationalised banks! However, if the cost is calculated at Rs 7.5 cr per Mwe, as experts outside the NPCIL say is closer to reality, the NPCIL’s dilemma could be even grimmer.

Chaturvedi says the track record of NPCIL is so good that they can now borrow any amount from the market. Against the fact that financial institutions like ICICI and IDBI have thus far refused to be lured into investing in nuclear power, Chaturvedi’s contention looks overtly optimistic. However, an admirer of Chaturvedi said: ‘‘Mark my words, don’t ask me how, but he is going to get the money for the projects he has planned hook or crook!’’