Toshiba crisis dampens AP nuke plant prospects

The crisis in Toshiba Corporation’s Westinghouse Electric Company (WEC) has cast a shadow over the nuclear power plant, which was proposed to be set up in Andhra Pradesh.

New Delhi is concerned over the fate of the negotiation, which the Nuclear Power Corporation of India Limited (NPCIL) commenced with the WEC for setting up six light water reactors at Kovvada in Srikakulam district of Andhra Pradesh, sources told DH.

The Toshiba Corporation suffered a loss of over $6.2 billion on its nuclear power operations, mainly from its US-based unit WEC, which, according to some media reports, is also contemplating to declare itself bankrupt.

The conglomerate is also purportedly contemplating a gradual exit from the nuclear reactors’ construction business. The WEC, however, has not yet officially exited from its techno-commercial negotiations with NPCIL.

Financial crisis hit the Toshiba Corporation at a time when pre-project activities, including land acquisition, obtaining statutory clearances and detailed site investigation for the proposed power plant are on.

India and the US had in August 2016 agreed that NPCIL and WEC would finalise the contractual arrangements by June 2017 for setting up six reactors of 1,208 MWe capacity each at the proposed plant.

The WEC then submitted a techno-commercial offer to the NPCIL and commenced negotiation. The Export-Import Bank of the US and India also started discussion on a finance package to support the project.

Testing times ahead

Sources in New Delhi told DH that given the financial crisis that the WEC has landed in, it might be difficult to conclude the techno-commercial negotiations by June 2017.

Had NPCIL and WEC signed the contracts by the middle of this year, it would have been the first step towards commercial implementation of the landmark India-US civil nuclear cooperation agreement, which was finalised in 2008.

The WEC was expected to set up the nuclear power plant at Mithi Virdi in Gujarat, while the site at Kovvada was earmarked for the GE-Hitachi to build reactors. The WEC was allotted the Kovvada site early last year, as GE Hitachi had reservations over the nuclear liability regime of India.

If the WEC pulls out of the proposed project, it could be a setback for India’s plan to augment nuclear power generation from 5,780 MWe to 63 GWe by 2032.