Que: How do you see the significance of the timing of Assystem’s expansion decision into the Indian market with the acquisition of STUP?

Ans: The timing, of Assystem’s expansion decision into the Indian market with the acquisition of STUP, is really good in two aspects. Firstly, we wanted to establish a strong footprint in India, because as you are aware, we are a part of the Jaitapur project, which is now started moving. So, in line with the Prime Minister’s initiative of Make in India, we wanted to localize as much of the engineering work for that project as we could in India, and that would have only been possible if we had a strong footprint in India. Secondly, we started this process of acquisition nearly one and a half years back, keeping in view the infrastructure growth that the country is going through, and, the future is something we all look forward to. So, with these two things, I think the timing was pretty perfect for us to go in for this acquisition.

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Que: What opportunities Assystem eyes with this acquisition?

Ans: We see a lot of opportunities both in India and abroad. The opportunity we see or the way we are going to base our operations is on practically four pillars. The first is as you are aware that the Indian infrastructure market, be it roads or highways or be it airports, ports, buildings, stadiums, hospitals, etc they’re all coming up. And we would be very well prepared with this acquisition to cater to that Indian market.

Secondly, the acquisition of STUP was very strategic for Assystem because it brings in expertise, which we needed. In this sense, they bring in the civil side of the infrastructure. We were into nuclear digitization and systems. So, the two marry together very well. And therefore, we would use this expertise. The first pillar, as I said, would be the Indian infrastructure market. The second pillar would be to use this expertise to capture the market in the other geographies that we are presented and produce in India. So that’s the second pillar we are having.

So, we would be capturing the Indian infrastructure market, we would be capturing the infrastructure market in the Middle East, Uzbekistan, and other geographies that we are present in like Europe, and producing it in India. So, it matches with our philosophy as well as the government’s philosophy of Make in India.

The third pillar, as we are number two in the world for nuclear, is that we would use this footprint for not only Jaitapur, but for other nuclear renovation and other nuclear projects in India, both the upcoming ones and the existing ones. That’s the third pillar.

The fourth pillar is again producing in India the engineering capabilities that we have, we will produce in India for others -- for some proportion of the nuclear engineering for the other parts of the market world. So basically, it’s a four-pillared approach that we are having with the acquisition of STUP.

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Que: Can you share what is the amount of the acquisition?

Ans: We acquired a 99% stake in STUP and it is between €21 and €22 million, takes into account cash net of debt estimated to be some €1 million, and is subject to typical net cash/debt and working capital adjustments. The transaction has been closed now.

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Que: What is the strategy for India’s clean energy goals like you said about nuclear reactor plants you will be looking at and how much investment Assystem is expected to be made in India in the next two to five years?

Ans: This is not the end of the investment that Assystem is going to make in India, we have got plans to look at and we are already looking at and in discussion for some more acquisitions which will fit into what portfolio we will have, primarily into design engineering and system-oriented organization. So, we do plan to invest there. Now, regarding the first part of your question, Assystem brings onto the table energy transition, as well as digitization apart from nuclear, which is our bread and butter. So, we would be looking at renewable energy, we would be looking at clean energy, we would be looking at these aspects and we are very interested in developing these markets and catering to these markets in India.

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Que: As hydrogen has got traction these days like solar in India. So, will you be looking at scope in that sector as well?

Ans: Yes, this is what Assystem brings to the table in this acquisition. This is exactly our strength, and this is what we bring. And that is why I said what we get from STUP, totally marries with what we have. And it’s an absolute fit because there would be no redundancy in this acquisition.

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Que: Besides Jaitapur, what current projects you are currently working on and in the pipeline?

Ans: In India, as you know, the government has announced a very ambitious plan of more than 20-25,000 megawatts of nuclear energy in the next 10 years. So, we would be actively participating in most of them, depending upon the capabilities or not the capabilities, the capacities we are able to ramp up organically and inorganically. So, in India, we would be there, we would be a player in practically all the nuclear projects that are going to come. We would also be looking at helping NPCIL and renovation and restoration of the existing plants. So, there’s a huge market ahead of us in nuclear.

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Que: You’re already working with Dassault for factory construction in Nagpur. What are future collaboration plans?

Ans: We did the first part of the first stage of the Dassault plant for Rafale. We did that for Dassault, and as and when they come up with any further future expansion because we work very closely with Dassault in France. So obviously, we would like to partner them in India as well, for future projects.

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Que: What kind of technical support you can provide for Jaitapur nuclear project and have you signed any deals with other players as well?

Ans: Well, that’s a good question you’ve asked, as you know that Jaitapur is primarily one of the largest projects that would be there, not only in India but across the globe. And it is being dealt with very closely between EDF and NPCIL and the Government of India obviously, it has gone beyond that because it is with the Government of India level. We are aware of the part that we would be playing, see - the overall project is huge, it involves financing, it involves far too many things, but we are looking at the engineering part. So, I would have information relevant to that.

As you are aware, EDF has submitted in April 2021 to NPCIL its technical and commercial offer to build the six EPRs at Jaitapur in Maharashtra. The plant could have an installed capacity of 9.9 gigawatts and will be the most powerful nuclear plant in the world and should be able to meet the annual consumption needs of about 70 million Indian households. Within this offer, EDF provides the EPR technology including engineering and procurement, on its side NPCIL will be responsible for the construction and commissioning of the six units. And what I know of at this moment is that some news can be expected by all of us before the end of this year 2021.

Now, as far as Assystem is concerned and Jaitapur is concerned, Assystem has been part of this binding of close to EDF since the beginning. We have been working very closely with EDF since the beginning to set out operational foundations for the Jaitapur project. And we should be a key partner on the balance of plant scope of work with as I said with the capacity to localize in India, a significant part of the engineering studies. In addition, Assystem is part of a consortium also led by EDF with French and Indian industrial players for the creation of an engineering platform for studies within the scope of the Jaitapur project.

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Que: What kind of challenges do you see in India’s road towards nuclear goals currently?

Ans: The challenges are more from I would say the financing part plus the environmental issues, the perception that people have after the incidents which have happened in other parts of the world. But the benefits are aplenty as you are aware, clean energy, uninterrupted supplies, not dependent on coal supply. So, the major issue, which is not there in Jaitapur, is the land acquisition issue, which is a wide issue in India for any infrastructure project.

These are a few challenges which I’m sure are not there in Jaitapur. So, Jaitapur should move forward. And as I said, you will hear something, as we all expect, before the end of 2021. But otherwise, land acquisition is a key issue for any infrastructure project be it a nuclear project, or a road project or any such project.

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Que: You mean in future projects as well, if there will be government involvement and it will provide land, then that will be a possibility that sector can boost quickly?

Ans: Yes. If you see, you really hit the nail on the head. If you actually see in the last 10 years or so 15 years or so, wherever the land is available with the government that sector has boomed. If you see a lot of Metro projects have been successfully completed because the land was available. A lot of airport projects have been completed because the land was available. So, wherever the land acquisition is not an issue, the projects have really gone up and that sector has really picked up very fast. But wherever there has been a land issue, like roads and highways, the last mile completion has been an issue.

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Que: In that case, the government's role will be more important, right?

Ans: Yes if the land acquisition comes into play.

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Que: Does change in governments generally impact long-term projects?

Ans: See, the issue how I would see it is not from a political perspective, but from another perspective, the issue is where -- the land acquisition, when it happens, we need to provide -- there is a lump sum price you’re giving to the people whose land you are taking. Now, what happens is they become skeptical that this land price that they have got that money would finish off soon. So, what is the livelihood thereafter? So, I feel that the government has announced the CSR making it a bit mandatory, if there is confidence given to the people whose land is being taken that apart from the compensation that has been given to them, there is a likelihood of employment in that project or training of one member of that family of that village in a particular skill set like masons, bar bender, carpenter or whatever if comes under CSR activity, those people are trained and given employment, there is a continuity of livelihood earning, that would give a lot of comforts and make things easier.

You cannot make a law and enforce it because India is a very strong democratic country, you cannot force things on people. And we have seen it on various occasions when we have tried to force things on anyone, anything it doesn’t go through. So, if we partner, those people whose land we are taking, I think the land acquisition will become very easy. A typical example has been, you know, many tollways have been built without a murmur. And they are functioning very well, where people whose land was taken were provided with some sort of continuity in their earning apart from farming. So, I think irrespective of the political party, if the approach of any government which comes is of a partnership, I think this issue can be resolved.

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Que: Investors will be attracted at the time?

Ans: Yes. Today, why investors are running away and the government has to shell out money to set up projects is that I give money today and I’m not sure when I would get the land. If I do not get the land within this stipulated time budgeted by me my project cost goes haywire that is the reason investors are a little apprehensive in investing in projects where there is an issue of land acquisition. Even the banks today are reluctant to fund projects. If land acquisition, environmental clearances, you know, all these issues are not tied up.

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Que: How much helpful the state-owned lenders?

Ans: See, as I said, they can be all very helpful, but at the end of the day, anyone who invests money needs to see the return on investment because at the end of the day whether it is IREDA or it is PFC, they have public money, they need to show dividends. And therefore, once these bottlenecks are removed, people would prefer the PPP mode, you know, private party -- private players would be much interested in funding these projects because they would see a return on the investment the project coming up and the situation of government organizations like PFC and IREDA would improve dramatically because right now they are saddled with projects which have not moved. So, the non-performing assets will get converted into performing assets and all these companies would benefit from there. So, they would be more helpful than what they are today or they are stressed today. Even the banks are stressed today.

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Que: Do you seek any help from the government side during your expansion phase?

Ans: As engineering consultants, we would not like to see projects getting stalled because of land not coming in. The whole design has been done and the land, as I said, I emphasized the key issue today. Firstly, once the project takes off and the lands are there, the promoter should be, you know, funds should be available if they require and they meet the criteria, because today the banks are also very cautious in funding projects. So, the approval systems, the environmental clearance and all, these approval systems if they are eased off and the land acquisition issue is eased off, we as consultants would not see projects getting stuck once they take off and that is what is the dream of any consultant, any engineering consultant that whatever he has designed should fructify and be, you know, the fruit should be there on the ground and you can see it, you know, commissioned.

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Que: How Assystem has planned to impart technologically advance skills to its local employees both new and existing?

Ans: That’s a wonderful question. Say for the example of nuclear, I’ll take nuclear because that’s where India is going to grow and we need a lot of advanced technical skill sets in people. So, what we do is when we are doing projects in the UK or France or any other part of the world, we have engineers in India, and we send them to these projects for a period of anything between 6 months to 2 years or 3 years to work on these projects. And similarly, people from France, they come here and they had a team of these engineers and impart their knowledge to them. So, it’s a two-way process that we have.

For us geographical boundaries have no meaning, the organizational boundaries have no meaning. Anyone can work anywhere, and we ask people about their mobility, if they want to work on a project in the UK or a nuclear project in France or anywhere, we position them there. So, they get to have, you know, hands-on experience and acquire those skill sets and they get trained and before we put them on the project, they work in our offices, understand the whole system processes engineering, in whichever discipline they are, and then they are on to the project.

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Que: You will train the local workforce as well?

Ans: Yes! We have sent some young engineers, in fact, at the moment some 20 of my young engineers between 2 years of experience and 10 years of experience are right now working in France on various nuclear projects. So, it’s not the experts only that we pick up because we want these young guys to become experts and come back to India and work on projects like Jaitapur.

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Que: So, as per your estimate how many people got employment, and what are your expectations through this project?

Ans: See, as I said earlier, our Assystem STUP where after the acquisition will be on four pillars and one of the pillars is -- or two of the pillars is to produce in India for other parts of the world. Now, we will have a large force for infrastructure and a large force for the nuclear project, but nuclear project Jaitapur alone at its peak on the engineering platform would require somewhere around 700 to 800 people on the jet engineering platform alone. It’s a huge, huge, humongous project. And Assystem STUP in India we are starting with something around 1,300 people and in 2 years, we have plans of ramping it up to about 2,500 people minus Jaitapur. I’m not talking of Jaitapur because Jaitapur in itself is going to be an organization.

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Que: Do you think there’s a need for setting up more institutions in India that can provide practical train to the new generation passing out from colleges?

Ans: I would first go a step before that, there used to be an institution in India were called ITI, which would train people. Today, if you see projects, why projects are delayed in India, apart from land and other issues, you know, it is difficult to find skilled laborers, like bar benders, carpenters, electricians, masons and that is why I touched on this subject that if the government could revive those or make it more strong, wherever you pick up 1 or 2 people from each family who are willing to work and train them in these ITIs that will provide them education as well as direct employment once they graduate. So, it will fulfill two objectives of the government. One is education, bringing up the education at the level of the population and providing employment. Secondly, it eases the path of land acquisition. So, from my side, I think the government should look at the basic things and leave the implementation to the players who are into this rather than investing in the projects. They should invite investments from abroad in India and provide the workforce to do it.

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