RELIANCE Power Ltd, the energy company controlled by billionaire Anil Ambani, is in talks with General Electric Co and Areva SA to build nuclear plants after India changes rules to allow companies to invest in atomic energy.

The utility plans to build nuclear stations at two sites, Chief Executive Officer Jayarama Chalasani said in Mumbai. Reliance Power is also in talks with Toshiba Corp's Westinghouse Electric Co and Russia's Rosatom Corp, he said yesterday.

India may end a government monopoly on nuclear power generation after winning the backing of a 45-nation suppliers group this month to trade in atomic fuel and technology. Reliance joins state-run Nuclear Power Corp, GVK Power and Infrastructure Ltd and GMR Energy Ltd, in their plans to set up atomic plants.

"Private sector presence in India's nuclear business has a long way to go," said Girish Solanki, an analyst at Angel Broking Ltd in Mumbai. "Entering the business may be a positive for Reliance and other private sector companies but it's too early to talk about the impact."

Reliance Power shares climbed 3.7 rupees, or 2.4 percent, to 160.65 rupees (US$3.8) at the close in Mumbai trading. The stock earlier yesterday dropped 17.2 percent to the lowest since July 23, according to data compiled by Bloomberg News.

The government may unveil a policy to allow private companies access to the nuclear market after elections due by May 2009, Rajendra Pachauri, adviser to Prime Minister Manmohan Singh on climate change, said last Friday.

The setting up of nuclear projects may be opened up to include private and other state-run companies, India's Planning Commission has said. The effect of allowing private companies may become visible after 2011, the panel said.

India, the world's second-fastest growing major economy, won a waiver from the Nuclear Suppliers Group on September 6 as part of a US-backed deal. The South Asian nation plans to add 40,000 megawatts of nuclear power capacity by 2020, a third of the current total output, to beat shortages of as much as 17 percent during peak hours.

The NSG endorsement may give France's Areva and Russia's Rosatom a head start on Indian orders because companies in United States need Congressional approval to participate in supplying technology and fuel.

Nuclear Power Corp plans to start talks with General Electric and Areva this month while waiting for Congress to clear the deal, Chairman Shreyans Kumar Jain said last week. The state monopoly, which may buy US$14 billion of equipment in 2009, operates 17 reactors that produce 4,120 megawatts of electricity.

Mumbai-based Reliance Power has hired 10 people, some of them former employees of NPC, Chalasani said.

"We've been preparing for the last two years," Chalasani said. "There is a small team in place studying the market." Reliance Power wants land to be assigned for nuclear projects. The government should decide where the new plants should be located, Chalasani said.