L&T targets Rs3,000 crore from nuclear business

Power equipment major Larsen & Toubro, which has entered into a partnership with US nuclear power equipment manufacturer, Westinghouse (See: L&T-Westinghouse JV to make nuclear reactors in India), will give L&T access to technology necessary to build these light water reactors

Commenting on this deal, A M Naik, chairman and managing director, L&T, said since nuclear power is not allowed anywhere in private hands, the owner will always be NPCIL. ''The idea is that we form a consortium to construct a project together.''

He said the company is targeting Rs 3,000 crore as revenue from this business.

CNBC-TV18 shares wirh domain-b its exclusive interview with L&T chairman Naik.

Take us through the nature of relationship with Westinghouse. Is it likely to becoming more than a technology sharing arrangement?
This is an agreement which basically means that in India we will work together. I don't think there is anything more to it.

We have a lot of details to be worked out on the scope, what we will do, and what they will do. They have approved our manufacturing shops, our methods of working, our constructability and capability. They feel that in India, L&T is a better partner for them in whatever needs to be done.

Would you go ahead and put up a nuclear power plant?
The point is that nuclear power is not allowed anywhere in private hands, so the owner will always be NPCIL. The idea is that we form a consortium to construct a project together. That means if we get a chance to make a turnkey nuclear power plant, the 1,000 MW Westinghouse advance reactor will be more like Rs7,000 crore.

It might be early in the day but what kind of revenue potential does this business have as far as L&T is concerned?
It is still too preliminary a situation and there are still a lot of safeguards and agreements to be worked out. There are not many sites also available right now which are not identified, so the business will flow from the nuclear agreement program after two years or so.

But the Indian programme has now been expedited and that's good news.

There are four nuclear reactors now which are heavy water based pressurised water reactors. They are right now under tendering and maybe there will be four more now that the fuel is available.

Once this is done, the other nuclear reactors with Areva and Westinghouse and Russians will come into being. On the whole, we expect Rs3,000 crore a year.

We can't let you go without asking you about the developments that is happening with Satyam, what do you make of the developments in terms of three new directors that have been added to the board and what is likely to be your plan of action?
We have no plan of action except to wait and watch the constitution of the board is more governance oriented and more digging the past oriented.

You need some board, which also will build business and the one that will give confidence to the employees and customers. I am sure that they are going to do it and they are doing it to best of my knowledge.

We understand that you met P C Gupta, the corporate affairs minister earlier this week. LIC has been given board representation. Lazzard has completely exited the company because the government didn't respond to their submission that they must be consulted as far as the future course of action for Satyam is concerned. Where do you currently stand as far as consultation or board representation is concerned? Have you approached the government with any thoughts on that?
Not at all. We don't want representation as such but if we get full powers to direct the company we will, but merely attendance in the board is no.

We should realise that all major IT companies are camping at Satyam's customers to divert those businesses and contracts to them. So what will be left of Satyam we don't know, unless almost on a war putting the operational issues simultaneously for future are resolved.