Indian bill clears way for joint ventures

26 February 2016

India has amended its atomic energy act to enable the Nuclear Power Corporation of India Ltd (NPCIL) to form joint venture companies with other Indian public sector units (PSUs) in a move that will help the state-owned company to secure funding for new projects.

The Atomic Energy (Amendment) Bill 2015 amends sections 2 and 14 of Atomic Energy Act 1962, changing the definition of what constitutes a 'government company'. Previously, a government company was defined under the act as one in which at least 51% of the paid-up share capital is held by the central government. The 2015 bill expands this definition to include companies where the whole of the paid-up share capital is held by one or more government companies and the articles of association  of which empower the central government to constitute its board of directors.

The amendment will enable NPCIL to form joint ventures with other government companies whilst ensuring the government retains control over such joint ventures. It does not extend to private sector companies, nor does it allow direct foreign investment in India's nuclear power sector - although there is no restriction on direct foreign investment in supply chain industries.

Only two government-owned PSUs - NPCIL and Bhartiya Nabhikiya Vidyut Nigam Ltd (BHAVINI), a PSU set up to develop fast breeder reactors - are allowed to operate nuclear power plants in India. Both are under the administrative control of the Department of Atomic Energy.

NPCIL has in the past looked into cooperation with various other companies and in 2010 it signed an agreement to form a joint venture for the construction of new nuclear power plants with the country's largest power company, National Thermal Power Corporation. It has also signed agreements with companies including National Aluminium Company, Indian Oil Corporation Ltd and Indian Railways. The new legislation should clear the way for such joint ventures to proceed.

The bill was passed by the Indian parliament in the Winter Session of 2015 and enacted on 31 December, minister Jitendra Singh told the Lok Sabha, India's lower house, on 24 February.

Researched and written
by World Nuclear News

Filed under: Contracts, Energy policy, India