People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 35

September 02, 2012




Contract with Areva must be Cancelled


On August 17, 2012, the National Committee in Solidarity with Jaitapur Struggle sent a letter to the prime minister, asking him that the contract with Areva for nuclear reactors to be set up at Jaitapur, Maharashtra, must be cancelled. The letter was been signed by Prakash Karat, A B Bardhan, Ram Vilas Paswan, Nama Nageswara Rao, K Danish Ali, Sitaram Yechury, D Raja and others.


WE are deeply concerned that both the central government and the government of Maharashtra do not seem to have paid due attention to the serious objections regarding the safety of the proposed Areva reactors and its costs raised by experts, parliamentarians, public figures and the local people.


We write to bring to your notice the following:

1) The project has not been subjected to an independent rigorous scientific techno-economic scrutiny and safety audit in the public domain. It is being pushed against the will of the local people. The 'conditional' environmental clearance granted by the Ministry of Environment and Forests in November 2010 is also based on an unscientific and deeply flawed Environmental Impact Assessment (EIA) report. The NEERI, the agency engaged to prepare the EIA, is admittedly not competent on matters concerning nuclear hazards. The environmental clearance is subject to clearance by the AERB on matters concerning nuclear energy. We understand that the AERB is yet to consider and approve the design of the Areva reactor. The environmental clearance thus granted has not considered seriously the main environmental issues and hazards arising out of this project.


2) The 1650 MWe European Pressurised Reactors (EPR) of Areva is an untested design and has caused serious concerns among the nuclear safety agencies of different countries. There are reliable reports that an internal audit of the French nuclear industry has criticised Areva and Electricity de France (EDF) for the undue complexity of EPR, and that EDF itself may be planning to discontinue the EPR design. 


3) There has been significant cost and time over-runs for the Areva EPR reactors. The first two EPRs under construction in Finland and France are yet to be commissioned and have already been delayed by more than four years due to technical and safety issues. The EPR project at Penly in France has been put on hold indefinitely. The initial cost of three billion euros has proved to be a gross underestimation. The costs have already risen to well over seven billion euros for Olkiluoto( Finland) as well as Flamanville (France).


4) Areva is in deep trouble on the financial front, as is clear from recent statutory disclosures. The Areva group debt stood at 2.77 billion euros (3.75 billion dollars) in June 2011. Areva's operating loss for the year 2011 is more than two billion euros.


The Areva has announced major job cuts. It has shelved the uranium enrichment plant in the American state of Idaho and the expansion of uranium mines in South Africa, Namibia and the Central African Republic. It has also announced the cancellation of expansion of three nuclear plants in France in view of the financial crisis. Areva share prices have fallen to one-tenth of its value between 2007 and 2012.


Siemens, the major technology partner of Areva, has announced its exit from the nuclear power business and its new focus is on the alternative power sources, in line with the decision taken by the German parliament to phase out their nuclear power stations by 2022 in the wake of the Fukushima disaster.


There are also reports that the EDF and the Areva have joined hands with a Chinese firm to develop a new reactor of 1000 MWe to replace the EPR in the long run.


In view of the above developments, it is unlikely that the Areva EPR would today pass even an elementary test of techno-economic due diligence.


5) The NPCIL has pointedly refused to disclose the costs and resultant tariff for the JNPP. There is no justification for hiding the costs and tariff for a civilian nuclear power project. Our own calculations based on available information show that the investment cost for JNPP would be in excess of Rs 20 crore per MW, which is unacceptable. This would result in electricity tariff of not less than Rs nine per unit at current prices. This is not viable, and would impose very high rates of tariff for Maharashtra and other consumers.


6) The Fukushima disaster has raised questions about the co-location of multiple nuclear reactors at a single location. Therefore, the plan of putting up six reactors in Jaitapur appears seriously flawed after Fukushima.


7) The Fukushima disaster has shown that the radioactive hazard due to spent fuel cooling and storage is not less than that from the reactor itself. It has raised serious questions about design and location of spent fuel cooling and storage outside the main containment dome and at elevations above ground level. We understand that the present EPR design has both these defects.


8) Once the plant commences operations, the vast store of spent fuel produced will be a long-term hazard. It does not appear that NPCIL has made any plans to address this issue.   


In the light of the facts stated above, we are of the firm opinion that the contract with AREVA in respect of the Jaitapur nuclear power project should be cancelled.