Why did Modi rush a deal with ailing French company and Its problem reactor?

July 23, 2015 10:37

The ink had yet to dry on two separate agreements signed by Frances Areva with Larsen & Toubro and the Nuclear Power Corporation of India Limited for the French-designed 1650 MWe EPR reactor in Jaitapur, Maharashtra, when the French nuclear giant went into meltdown.

The agreements were signed with great fanfare during Prime Minister Narendra Modis visit to France on 10th April 2015 despite the fact that question marks on Arevas future as a viable nuclear player had been piling up thick and fast.

In May, mere weeks after Modi's visit, Areva announced colossal losses amounting to 4.8 billion euros (well above its capital base) and in June the French government, which owns 87% of the company, announced that Areva would be broken up, with its nuclear power arm, Areva NP, (including engineering, construction and design) being sold to another French energy giant, EDF.

The French state has an 84.5% stake in EDF.

Why then did India persist in signing MoUs with a sinking ship? Surely Indian decision-makers were not unaware of Arevas problems?

And why is India insisting on buying nuclear technology that may be quietly buried in the near future, technology that has trebled in cost while providing no proof of performance, cost or economics of operation so far?

What will be the fate of the agreements signed between Areva and L&T and Areva and NPCIL? Will they be automatically transferred to EDF and if so at what price?

Read more HERE

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