Indo-US Nuclear Deal: From Farce to Skullduggery?

M G Devasahayam

M G DevasahayamShri M. G. Devasahayam is a former IAS and Managing Trustee, Citizens Alliance for Sustainable Living, Chennai

He is the Convener of the PMANE Expert Group on Koodankulam.

Shri Devasahayam can be reached at

Either practicing deception as is its wont or under sustained pressure from the US government-business combine, the Manmohan Singh government is looking to use the ‘manufactured’ opinion of the Attorney-General of India to effectively sabotage a key provision of India’s nuclear liability law that would hold American reactor suppliers liable in the event of an accident caused by faulty or defective equipment. Prime Minister’s Office (PMO) is working overtime on this, ably assisted by RK Sinha, Secretary, Department of Atomic Energy (DAE). Nuclear establishment has even gone to the extreme extent of bypassing the Atomic Energy Commission and go straight to the Cabinet Committee on Security (CCS) to clear the proposal.

As is well known this Attorney General is a highly controversial person known for his flip-flops and his ‘opinion’ can be customized and tailor-made to suit the requirement! In this case AG has endorsed the view expressed by the Ministry of External Affairs (MEA) in an internal note that “a right was given to the operator to have recourse against the supplier but there was no mandatory obligation or requirement for the operator to do so and that the operator could choose not to exercise that right.” Taking shelter behind this ‘customised opinion’ government is pressurising Nuclear Power Corporation of India Limited (NPCIL) to sign a ‘working agreement’ with Westinghouse Electric Company to buy the 6000 MW Mithi Virdi (Gujarat) nuclear reactor for Rs. 90,000 crores by making a token payment of about Rs. 100 crores! They want this to be done before Manmohan Singh goes to Washington on September 27, to pay obeisance to US President Barack Obama. Remember what he did with George Bush some years ago after signing the Indo-US Nuclear Deal (“the whole of India loves you!”)

According to sources, the NPCIL, the plant owner and operator, considers the ‘working deal’ unfair since it waives off the right to recourse on part of the supplier. NPCL is reluctant to limit the liability on part of the US-based supplier because if a Fukushima-type tragedy occurs in this nuclear plant the Indian tax-payer would have to bear the cost of death and destruction which could be as much if not more than the estimated Fukushima accident cost of USD 50-70 billion (staggering Rupees 3 lakh to 4.2 lakh crores). But PMO, MEA and DAE are least concerned because their interest is more to please and propitiate their true masters in Washington and Moscow, with least consideration for national interests, energy security and citizen’s safety.

This deceptive move is in violation of section 17 of the Civil Liability for Nuclear Damage Act that grants the operator the right of recourse under one of three conditions: (a) if the right is expressly provided for in writing; (b) if the accident is caused by faulty material or equipment provided by the supplier; or (c) the accident results from an act of commission or omission of an individual done with intent to cause nuclear damage. Since 17(b) suggests Parliament intended to hold suppliers responsible even if there is no contractual liability, it is not clear how a public sector undertaking like NPCIL, which is answerable to Parliament, could give its suppliers a free pass. If NPCIL comes under pressure and does so they would be breaching the privilege of Parliament, besides committing contempt of Supreme Court, where two PILs with respect to the Civil Liability for Nuclear Damage Act are pending.

There is a Russian link also to this sordid story. Misusing all kind of draconian and repressive instruments at their command, and in brazen disregard of Supreme Court orders, Government of India recently put the Russian-technology Koondankulam Nuclear Power Plant (KKNPP), Unit 1, built with sub-standard material on the road to commissioning by going through the ‘first approach to criticality’ which is yet to produce a single unit of power. This is because KKNPP Units 1 & 2 having no nuclear liability Russians have dumped junk as reactor and therefore are unable to commission it even six years after its erection and installation. Taking this farce as ‘success’, and hoping for the same liability waiver, American companies have been pushing their projects in India, looking to finalize a commercial agreement between NPCL and Westinghouse Electric Company for the 6000 MW Mithi Virdi nuclear reactor where even the land acquisition process has not commenced and project is facing stiff opposition from local people on environmental, safety and livelihood issues. Another US project-10,000 MW Kovvada (General Electric) in Andhra Pradesh-is also on the pipeline, but at very preliminary stage.

To take forward this agenda, US Secretary of State John Kerry and Vice President Joe Biden visited India recently in quick succession. As a follow-up two influential U.S. senators (co-chairs of the Senate India Caucus, Mark Warner and John Cornyn) have written to John Kerry lamenting that even after eight years of the announcement of the landmark Indo-US civil nuclear agreement, which lifted the U.S. moratorium on nuclear trade with India, New Delhi is yet to provide a ‘workable’ nuclear liability architecture that will help companies to move forward. In the letter they have demanded: “We need to finish what we started and realise full commercial potential of this important agreement.”

Americans and Russians also teamed up to pressurise India with the Ambassadors of both countries coming together at a conference on “Nuclear Energy: Towards the Next Phase of Cooperation” at Delhi (23rd August) organized by ASSOCHAM with India’s entire nuclear top-brass in attendance! This high-octane lobbying seems to have borne fruit!

Ironically PMO is indulging in this skullduggery when India’s nuclear energy programme is under severe stress due to strong public protests and serious doubts about its economic viability and ecological desirability. What is worse, with the US government only recently allowing Westinghouse to share confidential technical information with the Indian nuclear authorities, DAE and Atomic Energy Regulatory Board, India is only just getting ready to start a technical evaluation of Westinghouse reactor. It is reported that the National Security Advisor, earlier India’s Foreign Secretary, who is more loyal to foreign interests, is anchoring the whole farce.

In today’s context, very high capital costs make nuclear energy ab initio unviable. Russian KKNPP units 3 & 4 are estimated to cost a whopping Rs 40,000 crore or Rs 20 crore a MW. This is 2.5 to 3 times higher than coal based and wind/solar power plants. If past is any indication, this cost could go up further. The initial estimate of KKNPP units 1 & 2 was Rs 13,171 crore, went on to Rs.17, 270 crore in 2012 and now reportedly even higher. KKNPP power as per NPCIL would cost about Rs 3/- a unit, but it is not clear as to how this tariff was arrived at. Probably, because this project has a unique financial model with a $2.55-billion soft loan on easy repayment schedule. Otherwise the capital cost alone would make the unit cost of power double!

Other projects will not have this luxury. Cost estimate of the American Westinghouse AP 1000 reactors claimed as the ‘safest, most advanced’, is not known. Though claimed at Rs. 15 crore per MW today, it could well be over Rs. 25 crore, by the time the plant is erected and commissioned. Cost of operation, future decommissioning and safe ‘spent-fuel’ storage would make unit cost of power prohibitive!

Ecologically the impact could be chilling. The Indo-US nuclear deal was originally meant to increase nuclear power capacity to 63,000 MW by 2032, from the present 4860 MW, which itself was utopian and impractical. But, the ‘triumphant’ signing of the deal sent the nuclear establishment into a tailspin and they are now targeting 275,000 MW capacity by 2050! These plants when located on canals/rivers will guzzle huge quantum of water for cooling and maintenance at the expense of millions of acres of irrigation. A 1000 MW nuclear plant will directly deprive around 40,000 acres of irrigation. Over 3 billion litres of hot-cum-waste water will be let back in to the canal rendering many more thousands of acres uncultivable while denying vast population of drinking water. On the coastline it would mean a 6,000 MW nuclear complex every 100 KM with each 1000 MW plant discharging same quantum of hot-cum-waste water into the sea severely damaging marine life and environment. In a populous and water-starved country this is inviting catastrophic disaster. Farms and fields will become barren, grain production will plunge, millions will go thirsty, coastlines will vanish and marine life will perish only for nuclear plants to generate gigawatts of power for some ‘development’!

In the event, American hopes to build on the ‘success’ at KKNPP appears to be far-fetched. Besides, there are several other negative factors that afflict nuclear energy as listed in the Annual Energy Outlook of the US Department of Energy: Long lead time of10/15 years for planning and construction; process to produce the fuel being the same as in fissile material for bombs; large amounts of fossil fuels used in mining/ processing the uranium fuel; radiation release, either from the reactors or from the waste; accidents though few, but with serious consequences; decommissioning at end of useful life very difficult & very expensive and long-term disposal of nuclear waste continuing to be a major issue. Further, nuclear power plants are tempting target for terrorist/enemy attack.

Despite all these realities the ‘myth’ of nuclear power thrives in India. This is largely due to the warped and secretive institutional structure of India’s nuclear establishment, which functions under a veil of secrecy. Atomic Energy Regulatory Board, formed in 1983 to overlook matters of safety in the sector is not an independent body but reports to Department of Atomic Energy, which is part of PMO that has huge vested interests in the nuclear sector. A recent CAG audit report castigates AERB for doing nothing except prescribing codes, guides and safety manuals. As a result safety of large-size nuclear installations in the country is at great peril.

Americans have a very big stake in India’s nuclear energy pie and they want to savour it without any ‘liability’. But in its anxiety and greed our nuclear establishment has bitten far too much than it can chew. Pursuing the nuclear-deal as ‘stand-alone’ option could do more harm than good to Indo-US relations, because India just cannot deliver what has been promised. Though the Russian stakes are smaller, the credibility loss, unpleasantness and bitterness caused by the KKNPP experience would hamper their progress considerably.

In wriggling out of nuclear liability for Westinghouse deal, CCS Note draws parallel to the KKNP Units 1&2 that have no nuclear liability provision. This is precisely where the danger lies because taking advantage of this fatal flaw Russian companies – Rosatom, through its subsidiary, Atomstroyexport and ZiO-Podolsk have virtually dumped junk and despite tall claims and several ‘approaches to criticality’ the plant is nowhere near commissioning. This is despite the fact that the reactor and other core equipments had arrived at the site in early 2005 and KKNP was originally scheduled to start commercial operation in December 2007. Repeated tests appear to have failed and everything is being kept under wraps! Now the same facility to dump an unproven 6000 MW nuclear plant in the state of Gujarat is being extended to Westinghouse through the secretly drafted ‘working agreement’. One only hopes that the people of Gujarat and its government will see through the fraud and halt it on its track.

India’s nuclear establishment and PMO should also see the writing on the wall, realise the reality and desist placing all their eggs in the ‘nuclear basket’, lest there be disaster! And they must also stop playing blatant fraud on the people of India to please and propitiate their foreign masters!

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