India's L&T Secures $83.6 Million in Orders for Nuclear Power Equipment Business Unit

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Researched by Industrial Info Resources (Sugar Land, Texas)--The nuclear power plant equipment business unit of Larsen & Toubro (BSE:500510) (L&T) (Mumbai), India's leading engineering and construction major, secured orders worth a total of $83.6 million in the past week.

These include a repeat order from Nuclear Power Corporation of India Limited (NPCIL) (Mumbai) for the design, manufacture and supply of four steam generators for units 7 and 8 of the Rajasthan atomic power plant, which are 700-megawatt (MW) pressurized heavy-water reactors (PHWRs). These would be the largest steam generators to be developed in the country to date, according to L&T. This contract follows a similar order placed with L&T by NPCIL for the supply of four steam generators for the Kakrapar atomic power project in Maharashtra. This order was placed in March this year and was valued at more than $70 million.

Another order secured by L&T's nuclear power plant segment last week was placed by the Department of Atomic Energy (Mumbai) for technology development of welded grid plates based on a new design supplied by Indira Gandhi Center for Atomic Research (IGCAR) (Kalpakkam, Tamil Nadu). In January this year, Baldev Raj, director of IGCAR, announced that scientists and engineers at the center are working on design modifications for four proposed fast reactors in an attempt to save nearly $104 million in costs. The proposed fast reactors, also known as fast spectrum reactors, will be different from the prototype fast breeder reactor (FBR) that is being developed at a cost of more than $717 million at Kalpakkam, Tamil Nadu. Fuelled by a mix of plutonium and uranium oxide, the fast reactors would breed more plutonium than they consume. Surplus plutonium will be used to fuel additional reactors. The reactors also will be built as twin units and share several facilities, which in turn will lead to a reduction in capital and operating costs. Power generated from the fast reactor would be sold at US 4.10 cents per kilowatt-hour (kWh) compared to the cost of US 6.56 cents per kWh of electricity generated from the FBR. To this end, the reactor design is being modified to reduce capital costs. These modifications include reduction in the number of welding points, use of smaller safety vessels as compared to the FBR, use of six steam generators as compared to eight in the FBR, and changes in the design of the grid plate, which constitute the core assembly of the FBR.

L&T, which has been developing technology for the domestic nuclear power segment during the past four decades, is currently the only Indian manufacturer to be accredited by the American Society of Mechanical Engineers (ASME) (New York) to use the "N" and "NPT" stamps for the design and manufacture of nuclear island equipment in accordance with international standards.

L&T is looking to capitalize on India's ambitious plan to add 60,000 MW of nuclear power generation capacity by 2032. The plan is expected to be launched soon, and the Indian government is expected to start placing equipment orders with vendors in the next 12 to 18 months. L&T already has entered into cooperation agreements with GE-Hitachi Nuclear Energy Incorporated (Wilmington, North Carolina), Westinghouse Electric Company LLC (Monroeville, Pennsylvania), Atomstroyexport (Moscow, Russia), and Atomic Energy of Canada Limited (Toronto, Ontario).

L&T plans to become a major exporter of nuclear power plant equipment including reactors and forgings, as well as emerge as one of the most integrated players in this sector. The firm is setting up a nuclear equipment forging unit at Hazira, Gujarat, with an investment of more than $307 million. The plant is scheduled to commence operations by 2011, with an initial manufacturing capacity of 200 to 250 tons per year of nuclear forgings. L&T aims to earn annual revenues in the range of $820 million to $1.23 billion from its operations in the nuclear power sector.

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