L&T says Areva order will take time

L&T on Monday said that it could take at least 18 months before it receives orders for supply of critical equipment from French major Areva for the Jaitapur nuclear power project. There are a number of issues, including pricing of power, that will have to be addressed by the Government before Areva can place orders for equipment.

Last week, the much delayed Jaitapur project got a shot in the arm with L&T and Areva signing a Memorandum of Understanding (MoU) for maximising localisation of critical components for the 10,000-MW nuclear power plant, which is expected to cost over ₹1 lakh crore over 30 years. This coincided with the Prime Minister Narendra Modi visit to France.

MV Kotwal, President, Heavy Engineering, L&T, told BusinessLine in a telephonic interview that major hurdles for implementing the project was the civil nuclear liability issue, which has been sorted by the Indian Government. By June, the insurance programme required for the project could also be in place, which will further speed up project implementation, he said.

He said that the MoU has enabled for formation of teams between Areva and L&T, which will work towards reducing the cost of the components required for the project. Work is also underway for understanding French nuclear design requirements, “The MoU is also for a deep dialogue for getting transfer of technology from Areva,” he said.

For the Jaitapur project, L&T will get orders for making heavy and critical components such as pressure vessels and stem generators, which are at the heart of a nuclear power plant.

The project will be executed by L&T Special Steel and Heavy Forgings, which is a joint venture between L&T and the Nuclear Power Corporation of India. This venture has a manufacturing facility in Hazira, Surat.

The 65,000-square metre integrated facility at Hazira offers modern melting equipment. It also has one of the world’s largest forging press, capable of producing forgings as large as 5 m in height and 5.2 m in diameter. It is supported by a machine shop and an advanced testing unit.

Kotwal, who is also a whole-time director of the company, said the Hazira facility is now fully qualified for making nuclear forgings. It has supplied components for pressurised heavy water reactors for Indian reactors and high pressure reactors used in Hydrocarbon sector, he said.

“A few weeks back we had invited the top brass of Areva to visit out Hazira facility. Once that happened, Areva developed confidence in our ability to make the critical nuclear forgings and components. These forgings can be made with the present capacity at the unit,” he said.

Kotwal said that there would be a definite reduction in cost of the components for Jaitapur project but the minute details of the cost are being worked out. The lower labour and engineering cost in India is to L&T’s advantage. The company is already making nuclear components for the Indian nuclear programme therefore it has the trained manpower and work culture to handle such projects.

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