//India may pay GE, nuclear reactor builders $40 bn

India may pay GE, nuclear reactor builders $40 bn

Saturday, May 20, 2006, Bloomberg

MAY 19:  Seeking to meet its rising energy demands, India may pay suppliers, including General Electric (GE) Co, Rs 1.8 trillion ($40 billion) to build nuclear reactors over the next 14 years, a government official said.

France’s Areva SA, Electricite de France and US-based Westinghouse Electric Co are among the possible providers of 25 to 28 reactors by 2020, chairman Nuclear Power Corporation of India, SK Jain said.

US President George Bush is seeking an end to the three-decade-old international ban on nuclear technology sales to India, prompted by its atomic bomb test in 1974.

India and China are leading a worldwide revival in atomic energy after oil and coal prices rose to record levels. Russia and Japan are among the nations that may lift sanctions on India and enter the contest for contracts to install 40,000 megawatts (mw) of capacity. This would be enough to supply electricity to four cities the size of New York.

‘‘We are very confident the deal and all agreements will go through,’’ Mr Jain said in an interview in Mumbai on Tuesday. ‘‘As an outcome of that, India will have access to the global nuclear technology market.’’

President Bush has asked the US Congress to end nuclear sanctions against India. US and other members of the so-called nuclear suppliers group, including France, Russia, Japan and Australia, are debating whether to lift their ban on exports of equipment and materials for atomic use to India.

India is turning to overseas nuclear-reactor builders after Prime Minister Manmohan Singh doubled the nation’s 2020 capacity target from an initial 20,000 mw. India’s homegrown atomic power programme won’t cope with the stepped-up construction plan, Mr Jain said.He addedthe programme was also limited because of a uranium shortage caused by the international embargo on sales of the reactor fuel. Once sanctions end, supplies of enriched uranium will be included in contracts to install reactors.

The US removed the economic sanctions in 2001 after the September 11 attacks to bolster support for its campaign against terrorism. The US decision to give India access to civilian nuclear technology was initiated during Mr Singh’s visit to Washington in July and concluded during President Bush’s visit to India seven months later.

The agreement, which needs the approval of the US Congress, will help India develop its nuclear power industry to boost energy generation. The South Asian nation is seeking to raise output at its atomic power plants, which account for about 3% of generation, to reduce reliance on oil and coal.

‘‘We cannot depend on one source to meet all our energy needs,’’ said V Raghuraman, senior adviser on energy at CII.