MUMBAI, December 23: The Centre is holding talks with the Russian government for setting up a 2000MW (2X1000MW) nuclear power plant at Kudankulam, Tamil Nadu. The bilateral agreement, to assist the implementation of the proposed power station, is likely to be signed next month.

"Talks are at a final stage," said Nuclear Power Corporation of India chairman and managing director YSR Prasad. He added that the initial agreement will focus on preparing a detailed project report (DPR). The Centre has given an in-principle clearance for the Rs 12,000 crore project ($3 billion) for which funding has not been finalised.

As per the proposal, Russia will help in the construction of two units of pressurised water reactors (VVERs) of 1000 MW each, said Prasad. The project has obtained clearances to start construction. "The site investigations, including hydrological surveys and microseismic studies, have been completed," he added.

Work on the project will commence after DPR approval from the Department of Atomic Energy (DAE). "Land at Kudankulam, both for the plant site and township, has been acquired," said Prasad, adding that preliminary infrastructure facilities like approach road, property wall, power, water for construction have been established.

The DAE and the ministry of power recently took a decision to enhance nuclear power generation in the country. According to ministry officials, nuclear energy generation has now been given a greater thrust.

"Nuclear power is an economic option for energy supply, especially at locations far flung from coal reserves, and particularly if hydel sources are not available," they said.

The country should have an optimal mix of thermal, hydro, nuclear, renewable and non-conventional energy sources, officials said. The total nuclear installed capacity in India is 1840 MW and there is tremendous potential for expansion. The government has decided to enhance capacity of existing plants as well as setting up new stations.The government's renewed interest in nuclear power stems from the fact that plant load factor (PLF) in nuclear plants has improved significantly in the recent past. According to Prasad, overall capacity factor of these plants during 1996-97 was 67 per cent, seven per cent more than the previous year.

Though the initial cost of setting up a nuclear power plant is higher than a thermal power station, in the long run, power generated here is more economical, he added. "The long term nuclear energy policy is based on recycling nuclear fuel and harnessing the sizable thorium resource that the country has," Prasad said.

In spite of the controlled technology regime, India acquired advanced technology required for setting up a nuclear power plant. However, financing is still a million dollar question, Prasad said, given that there is no question of participation from private local or foreign players. The corporation is seeking help from the Centre in extending the tenure of long term loans as the project's gestation period is long.