1. INFRASTRUCTURE REGULATORY ISSUES INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR
• INFRASTRUCTURE ISSUES
• RISK MITIGATION
• DEVELOPMENT CONSIDERATIONS
• TENDERING
• CONTRACT
• FINANCE MODELS
• LEGAL FRAMEWORK
Presented by: P R AT E E K D A S G U P TA
PRANAV MISHRA

2. NUCLEAR ENERGY
When a neutron strikes an atom of
uranium, the uranium splits into two lighter
atoms and releases heat simultaneously.
This heat energy is used for various
purpose, such as electrical power
generation, powering submarines, space
shuttles, nuclear bombs and missiles etc.
It doesn’t emit any polluting gases which have
adverse effects such as Global Warming, Acid
Rain, Ozone Depletion etc.
It is a highly concentrated source of
energy, with 1 kg Uranium producing power
of over 50,000 kWh and 35,00,000 kWh on
reprocessing.
INFRASTRUCTURE REGULATORY ISSUES INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

3. N U C L E A R P O W E R P R O J E C T S TA G E S
A nuclear power plant essentially has 5 stages
• Pre-Project
• Project Decision Making
• Plant Construction
• Plant Operation
• Plant Decommissioning
The overall project life of Nuclear Power Plant
is about 75 – 100 years
INFRASTRUCTURE REGULATORY ISSUES INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

4. N U C L E A R P O W E R P R O J E C T S TA G E S
INFRASTRUCTURE REGULATORY ISSUES INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

5. NUCLEAR INFRASTRUCTURE ISSUES
International Agreements and Safeguards Regulatory Framework
Financial Resources Codes and standards
Nuclear Law Safety Assessment Capabilities
Educational Programmes Physical Facilities
Public Consultation Communication
Engineering / Manufacturing Procurement
Human Resources Emergency Response Planning
Project Management Construction / Commissioning
INFRASTRUCTURE REGULATORY ISSUES INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

6. N U C L E A R R I S K S A N D M I T I G AT I O N
INFRASTRUCTURE REGULATORY ISSUES INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

7. N U C L E A R R I S K S A N D M I T I G AT I O N
INFRASTRUCTURE REGULATORY ISSUES INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

8. A S S O C I AT E D O R G A N I Z AT I O N S
THE GOVERNMENT (policy making) THE FUTURE PLANT OWNER
• Energy Supply • Electricity system expansion planning
• Safety and Regulation • Performance of economic analyses
• Environmental protection • Defining the projects
• Domestic Infrastructure development • Obtaining licensing and executing them
and operating the plant safely
THE NUCLEAR REGULATORY BODY
• Safety of pressure vessels, electrical installations, pollution control, environmental protection
• Promotion and Co-ordination between various R&D organizations
• Encourage participation for Nuclear Power Plant Projects
• Advancement of educational institutions
INFRASTRUCTURE REGULATORY ISSUES INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

9. D E V E L O P M E N T C O N S I D E R AT I O N S
LAWS
Radiation Protection
Laws Concerning Nuclear Safety
Plant / Material Ownership
• Law and regulations for radiation protection
• Law and regulations for safety of nuclear installations
• Compatibility of national radiation protection and nuclear safety regulations with IAEA codes
• Law and regulations for ownership of nuclear installations and materials
• Law or policy concerning nuclear third party liability
• Bilateral nuclear supply agreements
• Conventions on early notification and assistance
• Physical protection convention
• Nuclear safety convention
• Convention on safety of waste and spent fuel management
INFRASTRUCTURE REGULATORY ISSUES INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

10. D E V E L O P M E N T C O N S I D E R AT I O N S
ENERGY AND ELECTRICITY SUPPLY POLICIES
• National Development policies and plan.
• Implementation mechanisms for National Development plan.
• National policies for the Energy and Electricity sectors. Perceptions of major constraints, priorities.
• Electricity tariff policies.
• Environmental Protection Policies and their impact on the energy sector.
FINANCIAL MECHANISM
• Mechanisms for International Financing.
• Mechanisms for Local Financing.
INFRASTRUCTURE REGULATORY ISSUES INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

11. D E V E L O P M E N T C O N S I D E R AT I O N S
INTERNATIONAL AGREEMENTS
• Treaty on the non-proliferation of Nuclear weapons (NPT) INFCIRC/140
• Guidelines for Nuclear transfers, 1993 revision of NSG London guidelines
• Convention on the prevention of Marine pollution by dumping of wastes and other matter
(London Dumping Convention), INFCIRC/205
• International Convention for the safety of life at sea
• Convention for the suppression of Acts of Nuclear Terrorism
INFRASTRUCTURE REGULATORY ISSUES INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

12. TENDERS
Information provided by the owner Information requested from bidders
1. INVITATION LETTER 1. GENERAL INFORMATION
2. ADMINISTRATIVE INSTRUCTIONS 2. GENERAL TECHNICAL ASPECTS
3. GENERAL INFORMATION 3. TECHNICAL DESCRIPTIONS
4. TECHNICAL REQUIREMENTS 4. SCOPE OF SUPPLY AND SERVICES
5. SCOPE OF SUPPLY AND SERVICES 5. ALTERNATIVES AND OPTIONS
6. NATIONAL PARTICIPATION 6. QUALITY ASSURANCE PROGRAMME
7. BID EVALUATION CRITERIA 7. TRAINING
8. DRAFT CONTRACT TERMS AND CONDITIONS 8. PROJECT SCHEDULE
9. COMMERCIAL CONDITIONS 9. TECHNOLOGY TRANSFER
10. SAFETY AND SECURITY CONSTRAINTS 10. GUARANTEES AND WARRANTIES
11. DEVIATIONS AND EXCEPTIONS
12. COMMERCIAL CONDITIONS
INFRASTRUCTURE REGULATORY ISSUES INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

13. CONTRACT
Contract conditions
• Financing arrangements
• Down-payments
• Governmental approval or authorization
• International commitments
• Safeguards requirements
• Export license, construction license, operation license
• Pertinent regulatory and licensing requirements.
Turnkey Contract Split Package Contract
1. The owner has one contract with the main 1. The owner has multiple contracts with
supplier. suppliers.
2. The main supplier has overall responsibility for 2. The overall responsibility is divided
construction, and turns over responsibility for between a relatively small number of
the project to the owner/operator in stages contractors, each building a large section
during the commissioning phase. of the work.
INFRASTRUCTURE REGULATORY ISSUES INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

14. CONTRACT
Contract Components
•Definitions •Licensing
•General clauses •Delivery times
•Object of the contract •Documentation
•Planning and execution of the work •Spare and wear parts, consumables and special
•Information, inspection, testing and control tools
•Assignment of the work and subcontracting •Guarantees or warranties
•National participation and technology transfer •Take-over
•Training of personnel •Prices, price adjustments and terms of payment
•Changes and additional work •Force majeure
•Transport and customs clearance •Termination and suspension of the contract
•Risks and transfer of title •Guarantee of title and proprietary information
•Liability •Execution of the contract
•Insurances •Applicable law
•Quality assurance •Arbitration
INFRASTRUCTURE REGULATORY ISSUES INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

15. FINANCING
Major Challenges
• The high capital cost and technical complexity of
NPPs, which present relatively high risks during both
construction and operation
• The relatively long period required to recoup investments
or to repay loans for NPP construction, which increases the
risk from electricity market uncertainties
• The often controversial nature of nuclear projects, which
gives rise to additional political and regulatory risks
• The need for clear solutions and financing schemes for
radioactive waste management and
decommissioning, which only governments can formulate
INFRASTRUCTURE REGULATORY ISSUES INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

16. FINANCING
Financial Model for project fully financed through government guarantee.
INFRASTRUCTURE REGULATORY ISSUES INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

17. FINANCING
Financial Model for Public Private Partnership projects.
The private sector investors bring the equity and loans and the government participates through
assets and risk mitigation mechanisms.
INFRASTRUCTURE REGULATORY ISSUES INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

18. LEGAL FRAMEWORK
Nuclear laws and regulations address the following
• THE SAFETY PRINCIPLE (PREVENTION AND PROTECTION)
• THE SECURITY PRINCIPLE (PEACEFUL USE OF NUCLEAR POWER)
• THE RESPONSIBILITY PRINCIPLE (OPERATOR OR LICENSEE)
• THE PERMISSION PRINCIPLE (REVIEW AND AUTHORIZATION BY REGULATORY BODY)
• THE CONTINUOUS CONTROL PRINCIPLE (RIGHT OF INSPECTION AND ACCESS BY THE
REGULATORY BODY)
• THE COMPENSATION PRINCIPLE (EXTENT OF NUCLEAR LIABILITY)
• THE SUSTAINABLE DEVELOPMENT PRINCIPLE (PROTECTION OF FUTURE)
• THE COMPLIANCE PRINCIPLE (INTERNATIONAL AND TRANSBOUNDARY
AGREEMENTS, TREATIES AND CONVENTIONS)
INFRASTRUCTURE REGULATORY ISSUES INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

19. LEGAL FRAMEWORK
List of clearances required for setting up a Nuclear Power Plant
1. Clearance of the Ministry of Environment and Forests
2. Clearances from the Gol (Civil Aviation Department) and the Director, National Airports
Authority in connection with the height of any chimneys.
3. Confirmations from the Department of Economic Affairs, Ministry of Finance, the Department
of Industrial Development, Ministry of Industry, the Department Company Affairs and the
RBI, that the Company is permitted to enter into the Financing Agreements,
4. Consent of Gol to the issue of equity to Foreign investors
5. Consent of RBI for the subscription by he Foreign Investors in Shares in the Company pursuant
to Section-29 of FEMA (Foreign Exchange Management Act 1999)
6. Consent of RBI for the provision by the Company of guarantees and / or indemnities and the
ability of lenders and suppliers to receive payments in enforcement thereon including
liquidated damages pursuant to Section-9 and 26 of FEMA 1999.
7. Consent of RBI for payment to non-resident directors of the Company-Commissioner of
Electricity
8. Consent of RBI for the Company to establish and office outside India pursuant to Section-8 of
FEMA 1999 and to acquire immovable property to Section-25 of FEMA, 1999
9. Approval of the Chief Engineer Inspector for the Power Station
INFRASTRUCTURE REGULATORY ISSUES INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

20. LEGAL FRAMEWORK
List of clearances required for setting up a Nuclear Power Plant
10. Exemption from Section-10(15)(iv) of the Income Tax Act 1961 in connection with the interest
and other charges payment by the company on offshore debt
11. Permission from the Director General of Foreign Trade for the various imports pursuant to the
Foreign Trade (Development and Regulation) Act 1992.
12. Land acquisition Power plant – Land Acquisition Act 1894
13. Techno economic clearance under section 30 of Electricity Supply) Act, 1948
14. Permission from the Directorate General of Technical Development / Director General of
Foreign Trade to import helicopters, Aircrafts, Ships or other such vessels under the Foreign
Trade (Development and Regulation) Act, 1992
15. Consent under the Factories Act 1948 relating to firefighting capability
16. Tax confirmations and clarification in relation to the treatment of capital gains and offshore
securities offered by the Company and exemptions under Section-10(15)(iv) of the Income Tax
Act, 1961 in relation to any interest payable by the Company on offshore debt securities.
INFRASTRUCTURE REGULATORY ISSUES INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

21. LEGAL FRAMEWORK
List of clearances required for setting up a Nuclear Power Plant
17. A certificate form the General Insurance Corporation or any of its subsidiaries to the effect
that such insurance or reinsurance cannot be obtained from them
18. Consent from the Gol (Controller of Insurance) to the effecting by the Company of such
insurance and / or reinsurance with offshore insurers and/ reinsures and
19. Consent from RBI under FERA 1973/FEMA 1999 for the taking out of insurance and / or
reinsurance with offshore insures and / or reinsures and for the payment of any premiums
thereunder
20. Permission from the Director General of Foreign Trade for the import of spares pursuant to
the Foreign Trade Development and Regulation Act 1992
21. Consent of the Direction General of Civil Aviation to use and operate an airstrip and helicopter
landing pad, and use and operate a helicopter and / or other aircraft pursuant of the Aircraft
Act 1934
INFRASTRUCTURE REGULATORY ISSUES INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

22. LEGAL FRAMEWORK
NUCLEAR LIABILITY BILL
India framed the civil liability for Nuclear damage bill 2010, which stipulates the compensation
burden on the state-run reactor operator, the liability of government and the responsibility of
private suppliers and contractors.
Some major features of the bill are:
• The Atomic Energy Regulatory Board has to notify a nuclear incident within 15 days from the date
of a nuclear incident occurring.
• The operator of a nuclear installation will be liable for nuclear damage caused by a nuclear
incident in that installation or if he is in charge of nuclear material that caused the incident.
• If more than one operator is liable for nuclear damage, all operators shall be jointly, and severally
liable to pay compensation for the damage.
• The Bill states that the total liability for a nuclear incident shall not exceed the rupee equivalent
of 300 million Special Drawing Rights (Approximately Rs. 2100 crore)
INFRASTRUCTURE REGULATORY ISSUES INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

23. T H E AT O M I C E N E R G Y A C T, 1 9 6 2
The Atomic Energy Regulatory Board (AERB) was constituted on November 15, 1983
by the President of India by exercising the powers conferred by Section 27 of the
Atomic Energy Act, 1962 (33 of 1962) to carry out certain regulatory
and safety functions under the Act. The regulatory authority of AERB is derived from
the rules and notifications promulgated under the Atomic Energy Act, 1962 and the
Environmental (Protection) Act, 1986
Some of the important sections of the Atomic Energy Act are given as follows.
Section 2-1-(e)
"Plant" includes machinery, equipment or appliance whether affixed to land or not.
Section 3-1-(e)
To provide for control over radioactive substances or
radiation generating plant in order to -
• Prevent radiation hazards
• Secure public safety and safety of persons handling radioactive substances
• Ensure safe disposal of radioactive wastes.
INFRASTRUCTURE REGULATORY ISSUES INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

24. T H E AT O M I C E N E R G Y A C T, 1 9 6 2
Section 10.1-(c)
Rights to use and occupy the surface of any land for the purpose of erecting any necessary buildings
and installing any necessary plant
Section 10-1-(d)
Rights to use and occupy for the purpose of working the minerals and to use or acquire any plant
used in connection with any such mine or quarry
Section 10-(3)
Compensation in respect of any right acquired under this section shall be paid in accordance with
section 21
Section 22(1)
Notwithstanding anything contained in the Electricity (Supply) Act1948, the Central Government
shall have authority -
(a) to develop a sound and adequate national policy in regard to atomic power, to co-ordinate
such policy with the Central Electricity Authority and the State Electricity Boards constituted under
section 3 and 5
(b) to fix rates for and regulate the supply of electricity from atomic power stations, with the
concurrence of the Central Electricity Authority
INFRASTRUCTURE REGULATORY ISSUES INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

25. NUCLEAR POWER IN INDIA
The Nuclear Power Corporation of India Limited (NPCIL), a Public Sector Undertaking (PSU) under the Department
of Atomic Energy, was registered as a public limited company under the Companies Act in September, 1987 with
the objective of operating the Atomic Power Stations and implementing the Atomic Power Projects for the
generation of electricity in pursuance of the schemes and programmes of the Government of India under the
Atomic Energy Act, 1962.
INFRASTRUCTURE REGULATORY ISSUES INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

26. NUCLEAR POWER PROJECTS
INFRASTRUCTURE REGULATORY ISSUES INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR