Nalco rushes in with another ‘wasteful’ JV
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Like its Rs 12,000 crore joint venture with Gujarat Mineral Development Corporation (GMDC) for a smelter and alumina plant, where the feasibility report of its consultancy has termed it non-viable, National Aluminium Company's deal with Nuclear Power Corporation of India Ltd (NPCIL) for an atomic power plant in Gujarat too could court controversy.
Like the GMDC deal, which Nalco rushed into after having disregarded the advice of ICRA that ruled the project as financially unviable, the CVC has now begun investigating if Nalco has made yet another "wasteful investment" by rushing into the joint venture with NPCIL for building two units of Kakrapar Atomic Power Station near Surat. The MoU to form a joint venture company with NPCIL with 26:74 equity was signed on Nov 26, 2009 and then an agreement legally executed in November 2011.
Official documents available with The Indian Express show that there is little in the JV safeguarding Nalco's investment as well as any authority over the execution of the project, though it's in an advanced stage. Though the former CMD of Nalco CR Pradhan and NPCIL in July 2009 had agreed that that the latter will control the nuclear reactor part while Nalco will look after the conventional part of turbine, generator, sub-station, it was given a go by when former CMD and now director (finance) Bajrang Lal Bagra signed the agreement in 2011. In the board of directors of the new JV company, Bagra is the only representative from Nalco while NPCIL has four directors.
The CVC ordered a probe by Nalco's Chief Vigilance Officer after three separate complaints were lodged against the deal. CVC sources said there is "nothing in the agreement" to safeguard the interests of Nalco and the projected annual internal rate of return does not take into consideration the cost of disposing of nuclear-waste.
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