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Wait for Westinghouse till 2018, Washington tells India: report

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03 July 2017

The US administration has told energy-hungry India that Westinghouse Electric Co will emerge from bankruptcy and be sold by the year-end and that the United States is "looking forward to supplying US-built nuclear reactors to India once the nuclear supplier is back on its feet.

With committed orders from India and other countries, Westinghouse, which filed for Chapter 11 in March after an estimated $13 billion of cost overruns projects and casting a shadow over nuclear industry, may receive state support for a bailout, say reports.

Civil nuclear cooperation has been a cornerstone of US-India relations, and the proposed construction of six Westinghouse AP1000 reactors in Andhra Pradesh, announced in 2016, was left in limbo by Westinghouse's troubles.

The project also found specific mention in the joint communique during Prime Minister Narendra Modi's first meeting with President Donald Trump in Washington last week.

The communique had specifically mentioned the contractual agreements between Westinghouse Electric Company and the Nuclear Power Corporation of India for six nuclear reactors in India and also related project financing.

The Japanese-owned Westinghouse, which filed for Chapter 11 in March after an estimated $13 billion of cost overruns projects, now stands the prospect of a Chinese or Russian buyer acquiring it and its advanced nuclear technology falling into the hands of its foreign rivals, something that the US may not like.

"We were told that, by the end of the year, Westinghouse would really rework its situation and really be back in business," India's foreign secretary, S Jaishankar, told a media briefing.

Reports quoting sources familiar with the matter said the statement, which was backed by US guidance, clearly showed that Westinghouse would be sold to a US investor post bankruptcy, which could ensure closure of the reactor deal in 2018.

"This is a lot bigger issue than just allowing the United States a couple of plants in the southern part of the United States," US energy secretary Rick Perry told reporters.

"This is a massively important issue for the security of America and the security for America's allies."

Perry declined to elaborate on potential acquirers.

Perry is expected to lead a business delegation to India in October, which leaves the door open to a potential deal.

Besides, there are unsecured and unfinished projects like the Vogtle power plant in Georgia that is being led by Southern Co and the VC Summer plant in South Carolina, which is co-owned by SCANA Corp.

Toshiba has agreed on a liability cap on one of the US projects, while the other is yet to be negotiated.

Trump's pick for US ambassador to India, Kenneth Juster, who helped lay the ground for the talks on the civil nuclear accord, is expected to play a "critical role" in bringing the project to completion.

Westinghouse will provide the reactors only and construction will most probably be undertaken by its Indian partner – Larsen & Toubro – something of a booster to Prime Minister Modi's `Make In India' and President Trump's `America First' policies.

"We are capable of doing this, but of course the technology transfer has to happen," said SN Roy, head of L&T's nuclear business, who confirmed that L&T is the preferred contractor for Westinghouse.





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