The Government of India-owned Nuclear Power Corporation of India Ltd came out on the last day of 2024 with a Request for Proposal (or tenders) for building two Bharat Small Reactors (BSRs) of 220 MW each — taking the first material step towards ushering in a small modular reactor era in the country. NPCIL has rich experience in building and operating 220 MW Pressurised Heavy Water Reactors (PHWRs), whose design is to be tweaked to introduce features of passive safety and accident tolerance in order that the plants can be located without requiring a vast exclusion zone.

NPCIL has since postponed the deadline for receiving queries from interested entities twice — to January 31 and then to February 2. This suggests that the response to the notice for RFP has not been exciting. This is hardly surprising, given the conditions imposed on the prospective BSR developers (defined in the document as ‘User’). The User is to build the BSR under the supervision and control of NPCIL and transfer it to NPCIL for a consideration of one rupee; the ownership of the asset shall then vest with NPCIL. NPCIL shall operate the plant for which the User shall pay an “expertise fee” of 60 paise per kWhr of electricity generated, which shall increase by one paise every year after 2030-31.

The User shall bear all costs of (NPCIL’s) operation of the BSR, including fuel, heavy water, maintenance that involves biennial shut down for 40 days, disposal of spent fuel, taxes and insurance, without any say in the operations. NPCIL will transfer the net electricity generated (total generation minus the plant’s own consumption); the User shall make its own arrangements to sell the electricity, but at tariffs determined by the Department of Atomic Energy. It is hard to see why any business would be interested. Even if it were, it is a moot point as to why a financial institution would come forward to finance it. The borrower must spend his own money to build the plant, that too in a way that NPCIL dictates and then hand it over to NPCIL, only to wait for electricity to be delivered and sell it at tariffs over which he has no control.

If the government intends to “open up” the nuclear sector to private players, then the RFP document does practically nothing in that direction. Private sector companies, such as L&T, have always been involved in the building of nuclear reactors, even if not the whole reactor — so there is nothing novel about the RFP. It is not clear why NPCIL would get involved in the supervision of the manufacturing of the reactor, when there is an Atomic Energy Regulatory Board. The government could also have left it to the User to choose the operator — after all, the operator would be subject to the regulator’s supervision. The RFP document appears to be designed to elicit a response only from power sector PSUs such as NTPC; for these units, the generation from the BSR would be a small part of its total electricity production. That hardly amounts to opening up.