www.walchand.com

7th Nuclear Energy Conclave 20153rd November, New Delhi

Strategies for competitive value additionfor setting up Nuclear Power Projects

“Make in India”

An address by: Mr. G.K. Pillai

MD&CEO Walchandnagar Industries Ltd

Scope

- Basic Framework of Indian Nuclear Program

- Make in India for Nuclear

- A quick glance at the support provided by NPCIL/DAE and how industry responded

- Walchandnagar Industries Ltd – specific contribution

- Contours of plan for setting up NPP in India

- Areas of concern

- Strategies to achieve the plan, address concerns

Basic Framework of the “Indian Nuclear Program”

Stage 1 – Pressurized

Heavy Water Reactor (PHWR)

Stage 2 – Fast Breeder

Reactor (FBR)

Stage 3 – Thorium Based

Systems

A unique “Three – Stage Program”

1) Sequential program based on closed fuel cycle2) Spent Fuel of one stage is re-processed to produce fuel for the next stage3) Manifold multiplication in the “Energy – Potential” of the Fuel4) Aimed at optimum utilization of the country’s nuclear resources

India has ambitious nuclear power expansion plans to reach 63000 MW by the year 2032 by setting up nuclear reactors based on both indigenous technologies of PHWRs and FBRs and large size LWRs based on international co-operation.

Essence of “Make in India” relevant to the Nuclear domain

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1) Absorption of critical technology 5) Learnings in the field of2) Enhance indigenous content progressively - Design & Engineering

3) Independence in fuel supply, waste mgmt - Fabrication, construction, etc4) Flexibility, versatile skillset, employment - Commissioning & Operating

Public – Private PartnershipThe key theme behind

“Make in India”

A glance at the history of the Indian Nuclear Program in the 60s and 70s…

Raw Materials supplied as “Free Issue Materials”

Sharing of domain knowledge and technical expertise

Financial assistance to meet cash flow requirements

Posting of nuclear engineers at manufacturer’s location

Joint Development efforts, trials, mock ups, etc

Support by DAE / NPCIL to assist Indian Industry

How has the Nuclear Program evolved as of today?

Indian Industry has matured in undertaking manufacturing

No free-issue-material is being issued

Contracts awarded on basis of competitive tendering

It could be said that formative support has helped

Indian PHWR program has evolved and matured

Contribution of Walchandnagar Industries Ltd

- WIL’s contribution to indigenize the manufacture of primary and secondary Sodium Pumps for FBTR project with technical know-how from Hispano – Suiza, France are noteworthy

- A team from WIL visited France to assimilate the manufacturing process and manufacturing drawings were prepared with assistance of French Engineers

- On return to India, WIL successfully manufactured 5 more pumps which are efficiently working in FBTR reactor since mid 1980s

- Another successful example of public private partnership is heat treatment of long pump shafts done in a vertical pit furnace at HEC, Ranchi jointly done by engineers of WIL and HEC

Contribution of Walchandnagar Industries Ltd ..contd

End shield for 220

MWe Reactor

Calandria for 500 MWe PHWR

Contribution of Walchandnagar Industries Ltd .. contd

Calandria, KAPP-3, 700

MWe Reactor

Moderator Heat Exchanger, 700

MWe Reactor

Contribution of Walchandnagar Industries Ltd .. contd

Various components for 500 Mwe PFBR

Contribution of Walchandnagar Industries Ltd .. contd

Support Tank

Central Shield Structure

Walchandnagar Industries Ltd – Potential to grow

WIL also has an MoU with Atomenergomash of Russia to manufacture NPPEquipment in India at our 56 acre waterfront facility at Dahej, Gujarat

Indian Nuclear Program – At The Crossroads

1) The need for “Energy Security”2) Nuclear Power – “Clean Energy”3) Fossil Fuels – Pollution, Depleting Stocks4) Need to further indigenize Equipment Mfg for NPP5) Fillip to Indian Industry, Employment Creation

1) Issues related to Land Acquisition 2) Safety of NPP – Fukushima Incident3) Nuclear Proliferation4) Issues related to technology sharing5) Lack of global players

Contours of present plan of Govt for NPPs in India

1 • Overall umbrella plan of 63 GWe by 2030

2 • Involve foreign companies to set up NPP

3 • Indian Designs – 700 MWe PHWR, 500 MWe FBR

4 • Development of new NPP – AHWR, 800 MWe PWR

5 • Self reliance on front and rear end of fuel cycle mgmt

6 • Ensure proper nuclear waste mgmt & recycling

7 • Ensure critical materials production in India

Major Issues which have a bearing on the efficacy Of the Nuclear Program in India

1 • CLNDA Issue

2 • Availability of critical raw - materials

3 • Assurance of continued business

4 • Limited availability of competent manpower

5 • National Policy and Strategy for indigenization

6 • Fiscal concessions/benefits / incentives

7 • Other operational issues

Issues related to “right to recourse”, “patent & latent defects or substandard services” need to be resolved

Issues like “one time lump sum premium”, “minimum premium to make nuclear power competitive” need further clarity

General Contract Clauses of CLNDA need to have further clarity – fundamentally a limited liability company cannot bear an unlimited burden

Issue resolution to be done in a time bound manner

CLNDA

Availability of Critical Raw Materials

Limited indigenous sources of RM like Nuclear Grade Forgings, Castings, Special Grade Steel, Inconel, Titanium Tubes, Welding Consumables, etc

Revoking the free issue methodology could lead to better economics, standard quality, faster procurement lead times, faster execution

Indian Industry over a period of time should be encouraged to localize these materials with appropriate incentives

Assurance of continued business to pvt partners

Commercial Viability

Revision to the “L1”

Philosophy

“Order Visibility” to encourage

investments

Due importance to

prior experience,

proven ability

Funding of dedicated

facility expansion at vendors end

Limited availability of competent “Human Resources”

Public – Private Partnership in setting up facilities for technical and vocational training

Adequate budgetary support

Private players to be incentivized to invest in such long term training programs, facilities

National Policy & Strategy for Indigenization

Indigenous capability to replace critical equipment and spares, O&MHigh – End technology transfer from foreign

technology providers

Policy to indigenize 90% of equipments for reactors ordered with foreign tech providers

Fiscal concessions, incentives, benefits for encouraging pvt participation

Duty free import of

special Plant &

Machinery

Deemed export

benefits to contracts on single tender

basis

Terminal Excise Duty

Waiver

Reforms to procedure related to

DGFT refund

Working Capital at subsidized

rates

Other tax concessions and holidays

Other operational issues

Streamlining of Stage Inspection Process during Manufacturing

Flexibility in Contract – Structuring & Management

Further streamlining of procedures fostering faster cash flows

Suggested Way Ahead

Initiate process of dialogue with Indian Private Players to evaluate medium to long term opportunities

Evaluation of gaps, working out of contours of sustainable association (Public – Private)

Develop Joint Program Management Capabilities to achieve the goal of 63 Gwe by 2032

Separator Slide THANK YOU

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