Liability regime pushes new Kaiga unit cost to Rs 22k cr

The two upcoming 700 MWe nuclear reactors at Kaiga may cost close to Rs 22,000 crore, almost double the cost of similar units under construction elsewhere in the country.

The government is yet to finalise the project cost of Kaiga-5 and 6, but the work on the project will begin in December 2016. The two largest nuclear power plants in coastal Karnataka may cost significantly more than four similar 700 MWe units under construction at Rajasthan Atomic Power Station (RAPS) here, 50 km from Kota, and Kakrapar Atomic Power Station (KAPS), Gujarat.

While the two 700 MWe units at RAPS – Unit 7 and Unit 8 – comes with a price tag of Rs 12,300 crore, two more indigenous 700 MWe units under construction at KAPS will cost Rs 11,459 crore. In contrast, the two Kaiga units will cost more.

Undoubtedly, inflation accounts for part of the cost escalation. But the new liability regime, too, is pushing up the project cost, though officials at the Nuclear Power Corporation of India Limited (NPCIL) decline to admit it on record.

Several suppliers of nuclear components told Deccan Herald earlier that future nuclear energy projects would be costlier due to the new liability regime that in turn increased the insurance cost.

Kaiga 5 and 6 and the two new 700 MWe units at Gorakhpur Haryana Anu Vidyut Pariyojana are the first four indigenous reactors to be constructed post the new liability regime that came into being about four years ago and remained a thorny factor in the government's ambitious plan to ramp up nuclear energy generation.

At the beginning of the Twelfth five year plan, the NPCIL wanted to start work on 19 new nuclear power plants with a capacity of 17,400 MWe.

 But absence of clarity on the liability policies and lack of international agreements have come in the way of realising at least six big power plants with a capacity of 8500 MWe, which was to be made with foreign partners.