Oct 5, 2008

Business in Nuclear Energy Deal (123 Agreement)

India’s nuclear energy sector has $50 billion potential over the next 1-15 years. Industry sectors have begun to lobby with the government just after the 123 Agreement# pact to permit private sector entry in the industry. Indo-USA nuclear deal passed the USA Congress floor test on Oct 2, 2008.

Indian Corporate in power sector and heavy engineering started negotiating with foreign companies for nuclear power generation. This 123 nuclear deal will help lots of Indian companies to get business as main player and/or player for ancillary part production. Big multinational companies will get business in providing reactors and nuclear supply. This development will benefit infrastructure and power sector companies such as NTPC, Jindal, Larsen & Toubro, Tata Power and Reliance Power.

High technology sectors such as semi conductors, advanced manufacturing, precision engineering, defense equipment, advanced and specialty chemicals, electronics, sensors, environmental technology, space, automation and robotics, and Parma will be benefited by this nuclear deal. While some sectors will be helped by removal of restrictions on import of dual technology items and technology, others will get an opportunity to tap the potential created by nuclear trade.

IT can help in terms of software services, data management and control & automation. Also, the R&D skills from the Parma sector may play a crucial role. The R&D staff in Parma is well equipped to handle the sensitive technologies which India will get access to. They may also prove crucial in handling the chemical transformations and temperature control in the nuclear plants.”

However, actual contracts could take more than three to four years as varied issues, such as financial assistance and legal, regulatory and safety issues, are spelt out clearly and local capability is developed

State-owned Nuclear Power Corp of India (NPCIL), the monopoly nuclear power generator, has identified four reactor manufacturers — Westinghouse Electric Company (AP1000 series of reactors), GE-Hitachi (ABWR reactor series), Areva (1,000 mw European pressurized reactors, France) and Russia’s atomic energy agency Rosatom (VVER 1,000 reactors) — as among the frontrunners for new projects planned across the country. This is based on “suitability” of technical parameters for placement of orders that will form the first phase of the Center’s plan to build 40,000 mw of nuclear capacity by 2020.

Source: Indiatimes & Economic Times