Is privatising the NPPs a very sound idea or simply an inevitable trend?

Is privatising NPPs a sound idea or simply an inevitable trend?

Infrastructure major, GMR group, likely to invest Rs 35,000 crore on expansion projects, is gearing up for a foray into nuclear power production (NPP), aiming to be the first Indian private player to enter the sector. “The nuclear power is one sector which we are keenly studying at the moment. We have already kept a team ready,” GMR chairman GM Rao said. “Once the India-US civil nuclear deal, caught in a political controversy is operationalised, it will open new avenues for the private sector.”

The GMR group, which is expected to pump in large funds in the next five years in various sectors, such as airports and power in India and abroad, will seek opportunity in the nuclear energy sector as well.

"I prefer to be the first to enter there (nuclear power) as we have done in other sectors in the past. We were the first private player to enter airports...and we would like to be the first in whatever we do,” Rao added. The nuclear power sector has attracted attention from Tata conglomerate, which is also waiting in the wings to enter the sector once India starts international commerce in this area.

Rao said a strategy team of the GMR group, which has a market capitalisation of about $5 billion now, is working on finer details of the planned foray. He, however, declined to comment on the specifics such as investments and power generation capacity. Rao had said that the group's advisors have been working to chart out its future plans in areas such as power, airports and special economic zones.

The nuclear industry is surviving on a small number of new orders. In most countries, with liberalized electricity markets, experience indicates that nuclear power plants cannot compete without public subsidies. However, looking at it from the safety and environmental perspective, is privatising nuclear power plants a good idea? And how will this bear an impact on the power-privatisation trends in other countries?