INTRODUCTION

 Heavy Water Board is one of the industrial

units of the Department of Atomic Energy .

 HWB operates 6 Heavy Water Plants located

at Baroda ,Tuticorin, Kota, Manuguru, Thal,
Hazira and Talcher (R&D)

 HWB’s mandate is to produce heavy water for

use in the Pressurised Heavy Water
Reactors(PHWRs) as moderator and coolant
HEAVY WATER POOL MANAGEMENT
 THE ACTIVITIES RELATING TO
PURCHASE, STORAGE, CENTRAL
ACCOUNTING,INVENTORY MANAGEMENT
AND DISTRIBUTION OF HEAVY WATER TO
NPCIL PLANTS ARE TREATED AS
“COMMERCIAL ACTIVITIY” FROM 1.7.1979
 ARRANGEMENTS FOR TREATING HWP’s AS
COMMERCIAL CONSIDERED BY A
COMMITTEE WHICH INCLUDED
REPRESENTATIVE FROM BUDGET DIVISION,
MINISTRY OF FINANCE. HOWEVER STATUS
QUO ANTE RETAINED (DAE I.D.NO.11/2(6)/2003-
I&M(HWB)(11)/426 DT.12.5.2009.
CONTD .
 THE HWPM ACCOUNT IS MAINTAINED ON
COMMERCIAL PRINCIPLES AS APPROVED BY C&AG
AND PROFORMA ACCOUNTS OF HWPM ARE DULY
AUDITED BY COMPTENT AUTHORITY

 THE CERTIFICATION OF PROFORMA ACCOUNTS UPTO

2003-04 HAS BEEN COMPLETED AND FOR THE YEARS
FROM 2004-05 TO 2007-08, THE SAME HAS BEEN
SCRUTINISED BY IIW, DAE. DIRECTOR OF AUDIT,
SCIENTIFIC DEPARTMENTS HAS BEEN REQUESTED TO
DEPUTE AUDIT TEAM FOR CERTIFICATION.
A comparison of actual cost of production and provisional
pool price and actual pool price
COP fixed Provisional Final pool
by DAE Pool price price in
Year w.e.f Actual COP initially audited
1.4.1991 (Rs./kg) notified account
(Rs/Kg) (Rs./kg)
1993-1994 10,000 14593 8327 8311
1994-1995 10,000 12382 8785 9194
1995-1996 10,000 13098 8785 10012
1996-1997 10,000 15292 8785 10953
1997-1998 15662 11168 11921
1998-1999 16966 12250 13105
1999-2000 14537 13850 13980
2000-2001 14317 14609 14724
2001-2002 13859 15461 15276
2002-2003 12485 15923 15676
2003-2004 11184 15833 16050
2004-2005 11086 15596 15651 UA
2005-2006 12016 15648 15390 UA
CONTD.
Provisional Final pool
Pool price price in
Year Actual COP initially audited
(Rs./kg) notified account
(Rs/Kg) (Rs./kg)
2006-07 12528 15712 15211 (UA)
2007-08 12820 15712 15085 (UA)
2008-09 13384 15043
2009-10 14272 14982
2010-11 17840 15146
The work relating the preparation of Proforma
Accounts from 1993-1994 was transferred to
HWB on 14.12.1995 and audited accounts for the
period 1981-1982 to 1992-1993 were handed
over to HWB on 10.6.1996.

HWB had prepared and submitted the Pool

Accounts from 1993-1997 in Sept-98 taking into
account the cost of production as Rs.10,000/- kg
notified vide ID Note dated 30.4.1990 & ID Note
dated 7.8.96

.
HWB had prepared and submitted the Pool
Accounts from 1993-1997 in Sept-98 taking
into account the cost of production as
Rs.10,000/- kg notified vide ID Note dated
30.4.1990 & ID Note dated 7.8.96

Local Audit insisted for revision of Proforma

Account taking into account the actual COP
from 1992-1993 vide their letter dtd.
9.9.1998.
 HEAVY WATER POOL
MANAGEMENT
 The total Heavy Water, kept in stock, produced &
quantity supplied to nuclear power stations as inventory
are treated as a common pool .

 The HW in the reactor is called assigned for which annual

lease charges are fixed and recovered from NPCIL.

 The HW stockpiled with DAE/HWB/BARC is called

unassigned on which upto 2002-03 interest is capitalized.
 Provisions @ 5900 crores has been provided in BE 2011-
12 towards interest on Govt capital invested in HWPM.
This covers the shortfall in interest provisions upto 2003-
04 and fresh provisions from 2004-05 till 2009-10 for
which the preparation of profroma accounts was kept in
abeyance..
ISSUE PRICE OF HEAVY
WATER
 POOL/ISSUE PRICE IS CALCULATED EVERY YEAR
BY ADDING THE COST OF PRODUCTION OF HW
OF THAT YEAR TO THE OPENING STOCK &
DEDUCTING EXPORT QUANTITY AND RECEIPT
THEREOF

 MAKE UP LOSS REQUIREMENT IS CHARGED AT

POOL PRICE OF THE YEAR IN WHICH LOSS IS
ACCOUNTED (THE QUANTITY AND AMOUNT IS
REDUCED FROM POOL)
 COSTING METHOD OF HW
 COST OF PRODUCTON IS SEPARATELY WORKED
OUT BASED ON THE APPROVED METHOD WHICH
CONSISTS OF(1) WORKS COST ( 2) FIXED COST

 WORKS COST –OPERATIONAL EXPENSES IN

RESPECT OF HW PLANTS EXCEPT HWP, TALCHER
AND OTHER APPORTIONABLE EXPENSES IN
RESPECT OF CENTRAL OFFICE, HOUSING
COLONIES & GRANT IN AID.

 FIXED COST – INCLUDES DEPRECIATION OF THE

PLANTS, CAPITAL ADDITIONS ON STRAIGHT LINE
METHODS ON 95% VALUE AND RETURN ON
INVESTMENT@ 12%.
 THE LIFE OF THE PLANT FOR
DEPRECIATION PURPOSE IS TAKEN
AS 20 YEARS FOR THE PLANTS
EXISTING AS ON 2003 AND 25 YEARS
FOR THE NEW PLANTS, CPP 30
YEARS AND FOR THE HOUSING
COLONIES THE SAME IS TAKEN AS
40 YEARS.
 LIFE OF HW PLANTS
Name of the Year of Completion Extension of Completion
plant commenceme of 20 years life of plant of extended
nt of life life
depreciation
TUTICORIN 1978-79 1997-98 15 YEARS 2012-13
BARODA 1980-81 1999-2000 15 YEARS 2014-15
KOTA 1985-86 2004-05 15 YEARS 2019-20
THAL 1987-88 2006-07 15 YEARS 2021-22
HAZIRA 1991-92 2009-10 -
MANUGURU 1992-93 2011-12 -

DAE vide I.D. Note No.HWB/Accts/HWPM/2010/421 dt. 23.7.2010 has

been requested to extend the life of HWP, Hazira and Manuguru by 15
years and that of Tuticorin and Baroda by 10 years, since the plants are in
healthy operating conditions
 PRESENT DE/RE- RATED CAPACITY OF THE HWP’s

Name of the plant Date of Installed capacity Re-rated-De-

commissioning MT/year rated capacity
MT/Year

TUTICORIN July 1978 49 49

BARODA July 1977 45 45
KOTA April 1985 85 80
THAL April 1987 110 78
HAZIRA February 1991 110 80
MANUGURU April 1992 185 185
 CALCUALTION OF POOL PRICE – 2010-2011 (Provisional )
Qty.(kg) Amount
Op. Stock 8935276.807 133959833375
Add :Production during the year 490388.780 8748535835
Less Export 10989.600 111578184
Less Sale to Sterlite 42.258 2931500
Total 9414633.729 142593859526
Pool price(i.e. value/qty) 15146/kg
Less: Make-up loss(i.e. qty x pool price), -9753.010 147719089
BARC&NPCIL
Returned by BARC -937.460
Other Agencies for R&D work 19.487
Free issue 2.898
Add: Interest on unassigned 0

Cl. Stock 9405795794 142445845287

 The difference between subsidized rate and
pool rate: (Payments due upto 2008-09)

Station Subsidised Pool rate Inventory Amount

rate Of 1997-98 (MT) (in
(Rs./Kg.) (Rs./Kg.) crores)

Kaiga2& 8452 11921 303 55.59

RAPS3 301 52.45
Kaiga 1& 6881 11921 283 77.00
RAPS4 252 85.91
TOTAL 270.95
QTY OF HW IN THE POOL AT
THE END OF 2009-10 (in MT)
 RAPS –1 219  RAPS 2 256
 RAPS-3 271  RAPS 4 305
 MAPS-1 289  MAPS-2 247
 NAPS-1 286  NAPS-2 261
 KAPS-1 261  KAPS-2 278
 KAIGA-1 274  KAIGA-2 287
 KAIGA-3 300  TAPS-3 571
 TAPS-4 546
QUANTITY & VALUE OF POOL AT THE
END OF 2009-10

 ASSIGNED STOCK 4660 MT

 UNASSIGNED STOCK 4665 MT

 TOTAL STOCK 9325 MT

 VALUE OF STOCK RS. 14052 CRORE
Review of costing/pricing-Reasons
 The tariff for power from Nuclear Power Station is very
sensitive to the variation in the price of heavy water.

 The pool price has been increasing at a rate of about 9% per

year during the last 10 years because of accumulated interest
and due to change in demand scenario of hw

 With the increase in pool price the nuclear power tariff has
been increasing despite the fact the HWB has been bringing
down the cost of production by energy saving schemes from
year to year.

 The increase in price is mainly due to capitalisation of interest

on the value of unassigned heavy water accumulated as a
strategic reserve.
REVISION IN PRICING
 INTEREST NOT TO BE CHARGED ON UNASSIGNED
STOCK OF HEAVY WATER.

 PAYMENT BY NPCIL TOWARDS HW TO BE DETERMINED

IN SUCH A WAY THAT THE PRICE IS RECOVERED IN 40
YEARS(i.e. THE LIFE OF A POWER STATION) AT NET
PRESENT VALUE ASSUMING A DISCOUNT RATE OF 9% .

CONTD.
COSTING METHOD APPROVED BY
COSTS ACCOUTNS BRANCH
 O&M EXPENDITURE OF ALL PLANTS
EXCLUDING HWP TALCHER
 DEPRECIATION ORIGINAL ASSETS +
ADDITION
 ROI ON NETBLOCK INCLUDING
HOUSING COLONIES + 1/12 OF
WORKS COST
 OVERHEAD AS PER GFR 298
 Contd.
 OR EXISTING INVENTORY IN REACTORS, PAYMENT AS PER
NPV TO BE CALCULATED FOR 40 YEARS AT THE POOL RATE
OF 1997-1998 AND THE AMOUNT DUE FOR THE BALANCE
PERIOD OF 40 YEARS FROM 2003-2004 ONLY TO BE
COLLECTED

 FOR FUTURE SUPPLY, THE POOL RATE APPLICABLE FOR THE

YEAR IN WHICH THE SUPPLY IS MADE TO BE APPLIED

 AFTER COMPLETION OF 40 YEARS A TOKEN AMOUNT OF

RS.1/KG FROM NPCIL AS THE OWNERSHIP OF HEAVY WATER
STILL REMAINS WITH GOVT.

FOR MAKE UP LOSS PAYMENT AT LUMPSUM PAYABLE AT

THE POOL RATE FOR ACTUAL LOSS AS PER OLD METHOD TO
CONTINUE
POINTS FOR CONSIDERATION
 THE LEASE CHARGES FOR EXISTING REACTOR IS TO BE
CACULATED AT THE POOL PRICE OF 1997-1998 .
 CONCESSIONAL PRICE FOR KAIGA 1&2 AND RAPS 3&4 WERE
CALCULATED AS PER DAE ORDERS.
 INTEREST ON UNASSIGNED HW AMOUNTING TO RS.1900 .49
CRORE HAS BEEN CAPITALISED BETWEEN THE PERIOD FROM
1998-1999 TO 2002-2003 AND THE ACCOUNTS HAVE BEEN
AUDITED. THE SAME HAS TO BE ABSORBED BY NEW
REACTORS .
 THE DIFFERENCE IN CONCESSIONAL PRICE AND ACTUAL
POOL PRICE OF KAIGA 1&2 AND RAPS 3&4 WILL ALSO BE
LOADED INCASE THE ASSIGNED QUANTITY AT THE ISSUE
RATE WILL BE DEDUCTED FROM THE POOL.
 Difference in the revenue due to change in discounted rate

Total recovery in 40 Recovery per Annual Payment Recovery per kg

years kg (in (per
40 annum)
Rate of issue
years

Cost per kg that would be recovered at 9%

discounted rate for the heavy Water
issued in the year 2006-07 at
Rs.15712 per kg (300000 kg) 17187317520 57291 437893440 1460

Cost per kg that would be recovered at 9%

upto 2009-10 and at 5% discounted
rate from 2010-11 onwards, for the
heavy Water issued in the year 2006-
07 at Rs.15712 per kg (300000 kg)
11316057360 37720 274802880 916

Difference in the revenue 5871260160 19571 163090560 544