Labour, land woes may dog Indian nuclear power

By Himangshu Watts

NEW DELHI (Reuters) - A U.S. civilian nuclear deal with India opens the taps to the country's fuel-starved reactors, paving the way for them to double output, but building new capacity looks tricky.

Obstacles such as land acquisition -- already putting the brakes on projects like Tata Motors' low-cost Nano car -- and a shortage of engineers mean the industry could struggle to attract what the Confederation of Indian Industry hopes will be $27 billion in 18-20 nuclear plants over the next 15 years.

"Land acquisition for a big project has always been a problem for corporates, be it political interference or some other rules and regulation," said Hitesh Agrawal, head of research at Angel Broking.

State-run Nuclear Power Corp of India Ltd (NPCIL) is eagerly awaiting more fuel after the U.S. Congress on Wednesday approved a landmark deal that ends a three-decade ban on U.S. nuclear trade with India.

Its 17 power plants are running at half their total capacity of 4,120 megawatts.

"Progressively, we will be able to reach full capacity," NPCIL's executive director for corporate planning, Sudhinder Thakur, told Reuters.

Thakur said the company had also identified sites to build new plants, but analysts say it could be tough to acquire land from farmers and tribesmen without provoking protests.

Efforts to acquire land for manufacturing plants and mines by invoking a colonial-era land law have run into trouble in recent years, with protests dogging not just Tata but also plans by South Korea's POSCO and Tata Steel to build steel plants.