1. www.walchand.com 7 th Nuclear Energy Conclave 2015 3 rd November, New Delhi Strategies for competitive value addition for setting up Nuclear Power Projects “Make in India” An address by: Mr. G.K. Pillai MD&CEO Walchandnagar Industries Ltd

2. Scope - Basic Framework of Indian Nuclear Program - Make in India for Nuclear - A quick glance at the support provided by NPCIL/DAE and how industry responded - Walchandnagar Industries Ltd – specific contribution - Contours of plan for setting up NPP in India - Areas of concern - Strategies to achieve the plan, address concerns

3. Basic Framework of the “Indian Nuclear Program” Stage 1 – Pressurized Heavy Water Reactor (PHWR) Stage 2 – Fast Breeder Reactor (FBR) Stage 3 – Thorium Based Systems A unique “Three – Stage Program” 1)Sequential program based on closed fuel cycle 2)Spent Fuel of one stage is re-processed to produce fuel for the next stage 3)Manifold multiplication in the “Energy – Potential” of the Fuel 4)Aimed at optimum utilization of the country’s nuclear resources India has ambitious nuclear power expansion plans to reach 63000 MW by the year 2032 by setting up nuclear reactors based on both indigenous technologies of PHWRs and FBRs and large size LWRs based on international co-operation.

4. Essence of “Make in India” relevant to the Nuclear domain 4 1)Absorption of critical technology 5) Learnings in the field of 2)Enhance indigenous content progressively - Design & Engineering 3)Independence in fuel supply, waste mgmt - Fabrication, construction, etc 4)Flexibility, versatile skillset, employment - Commissioning & Operating

5. Public – Private Partnership The key theme behind “Make in India”

6. A glance at the history of the Indian Nuclear Program in the 60s and 70s… Raw Materials supplied as “Free Issue Materials” Sharing of domain knowledge and technical expertise Financial assistance to meet cash flow requirements Posting of nuclear engineers at manufacturer’s location Joint Development efforts, trials, mock ups, etc Support by DAE / NPCIL to assist Indian Industry

7. How has the Nuclear Program evolved as of today? Indian Industry has matured in undertaking manufacturing No free-issue-material is being issued Contracts awarded on basis of competitive tendering It could be said that formative support has helped Indian PHWR program has evolved and matured

8. Contribution of Walchandnagar Industries Ltd - WIL’s contribution to indigenize the manufacture of primary and secondary Sodium Pumps for FBTR project with technical know-how from Hispano – Suiza, France are noteworthy - A team from WIL visited France to assimilate the manufacturing process and manufacturing drawings were prepared with assistance of French Engineers - On return to India, WIL successfully manufactured 5 more pumps which are efficiently working in FBTR reactor since mid 1980s - Another successful example of public private partnership is heat treatment of long pump shafts done in a vertical pit furnace at HEC, Ranchi jointly done by engineers of WIL and HEC

9. Contribution of Walchandnagar Industries Ltd..contd End shield for 220 MWe Reactor Calandria for 500 MWe PHWR

10. Contribution of Walchandnagar Industries Ltd.. contd Calandria, KAPP-3, 700 MWe Reactor Moderator Heat Exchanger, 700 MWe Reactor

11. Contribution of Walchandnagar Industries Ltd.. contd Various components for 500 Mwe PFBR

12. Contribution of Walchandnagar Industries Ltd.. contd Support Tank Central Shield Structure

13. Walchandnagar Industries Ltd – Potential to grow WIL also has an MoU with Atomenergomash of Russia to manufacture NPP Equipment in India at our 56 acre waterfront facility at Dahej, Gujarat

14. Indian Nuclear Program – At The Crossroads 1) The need for “Energy Security” 2) Nuclear Power – “Clean Energy” 3) Fossil Fuels – Pollution, Depleting Stocks 4) Need to further indigenize Equipment Mfg for NPP 5) Fillip to Indian Industry, Employment Creation 1) Issues related to Land Acquisition 2) Safety of NPP – Fukushima Incident 3) Nuclear Proliferation 4) Issues related to technology sharing 5) Lack of global players

15. Contours of present plan of Govt for NPPs in India 1 Overall umbrella plan of 63 GWe by 2030 2 Involve foreign companies to set up NPP 3 Indian Designs – 700 MWe PHWR, 500 MWe FBR 4 Development of new NPP – AHWR, 800 MWe PWR 5 Self reliance on front and rear end of fuel cycle mgmt 6 Ensure proper nuclear waste mgmt & recycling 7 Ensure critical materials production in India

16. Major Issues which have a bearing on the efficacy Of the Nuclear Program in India 1 CLNDA Issue 2 Availability of critical raw - materials 3 Assurance of continued business 4 Limited availability of competent manpower 5 National Policy and Strategy for indigenization 6 Fiscal concessions/benefits / incentives 7 Other operational issues

17. Issues related to “right to recourse”, “patent & latent defects or substandard services” need to be resolved Issues like “one time lump sum premium”, “minimum premium to make nuclear power competitive” need further clarity General Contract Clauses of CLNDA need to have further clarity – fundamentally a limited liability company cannot bear an unlimited burden Issue resolution to be done in a time bound manner CLNDA

18. Availability of Critical Raw Materials Limited indigenous sources of RM like Nuclear Grade Forgings, Castings, Special Grade Steel, Inconel, Titanium Tubes, Welding Consumables, etc Revoking the free issue methodology could lead to better economics, standard quality, faster procurement lead times, faster execution Indian Industry over a period of time should be encouraged to localize these materials with appropriate incentives

19. Assurance of continued business to pvt partners Commercial Viability Revision to the “L1” Philosophy “Order Visibility” to encourage investments Due importance to prior experience, proven ability Funding of dedicated facility expansion at vendors end

20. Limited availability of competent “Human Resources” Public – Private Partnership in setting up facilities for technical and vocational training Adequate budgetary support Private players to be incentivized to invest in such long term training programs, facilities

21. National Policy & Strategy for Indigenization Indigenous capability to replace critical equipment and spares, O&M High – End technology transfer from foreign technology providers Policy to indigenize 90% of equipments for reactors ordered with foreign tech providers

22. Fiscal concessions, incentives, benefits for encouraging pvt participation Duty free import of special Plant & Machinery Deemed export benefits to contracts on single tender basis Terminal Excise Duty Waiver Reforms to procedure related to DGFT refund Working Capital at subsidized rates Other tax concessions and holidays

23. Other operational issues Streamlining of Stage Inspection Process during Manufacturing Flexibility in Contract – Structuring & Management Further streamlining of procedures fostering faster cash flows

24. Suggested Way Ahead Initiate process of dialogue with Indian Private Players to evaluate medium to long term opportunities Evaluation of gaps, working out of contours of sustainable association (Public – Private) Develop Joint Program Management Capabilities to achieve the goal of 63 Gwe by 2032

25. Separator Slide THANK YOU 25