Kovvada nuclear plant expensive and dangerous: former Power Secretary warns CAG [read letter]

We are publishing an urgent letter written by India’s former Union Power Secretary and eminent civil society activist Dr. EAS Sarma, to the Comptroller and Auditor General of India(CAG), highlighting how in the wake of terminal crisis of American and Japanese nuclear corporates, the proposed Kovvada nuclear plant in Andhra Pradesh would turn out to be exorbitant and dangerous.

14-40-4/1 Gokhale Road
Visakhapatnam 530002
Email: eassarma@gmail.com

​Shri S K Sharma​
Comptroller & Auditor General of India (CAG)

​Dear Shri Sharma​,

Subject:- Proposed nuclear power projects at Kovvada in Srikakulam District and at a coastal location near Nellore in Nellore District in Andhra Pradesh- DAE’s reply to CAG’s enquiry

I write this letter in continuation of my earlier letter dated 6-5-2017, a copy of which is forwarded here.

As I have been repeatedly saying, DAE’s proposal to set up a large number of nuclear power projects is imprudent in view of the potential risks associated with the technology, unsatisfactory arrangements for waste disposal, uncertainties in the cost of decommissioning and the high cost of nuclear energy. In addition, in the case of imported reactors and imported fuel, on which most of DAE’s projects are based, no competitive bidding procedures are being adopted and the costs are dollar-denominated involving the risk of fluctuations in the exchange rates.

As the Constitutional authority responsible for appraising the Parliament of the cost efficacy, the performance risks and potential accident risks of nuclear power, you may have to examine these aspects in detail as the investments contemplated and the contingent liabilities that exist run into several hundreds of thousands of crores of rupees. The amounts involved far exceed the magnitude of the coalgate and the 2G spectrum amounts.

Till date, the DAE has not adopted the Bill that the Parliamentary Committee on DAE had recommended on an independent regulatory authority without which, as things stand today, the accident risks are going to be very high.

(DAE’s reply to CAG)

In this connection, UK’s National Audit Office (NAO) has audited the country’s proposed Hinkley nuclear power plant and questioned the prudence of the government decision. I have enclosed here a news report on this with the title, “National Audit Office slams Government’s ‘high cost and risky deal’ for Hinkley Point nuclear power station”.

The news report mentions Amyas Morse, head of the NAO, saying: “The Department [for Business, Energy and Industrial Strategy] has committed electricity consumers and taxpayers to a high cost and risky deal in a changing energy marketplace.”

What applies to the Hinkley plant applies equally to India’s plans to add nuclear generation capacity, whether based on indigenously manufactured reactors or imported ones. Considering the steep fall in the unit price of electricity from renewables, nuclear power makes no sense whatsoever. Moreover, in the case of imported reactors and fuel, the non-transparent manner in which imports are contemplated raises questions of propriety. Added to this is the possibility of the global uranium producers forming a cartel to hike up the fuel price.

Most reactor suppliers have become bankrupt and their ability to supply reactors on time and their ability to ensure the highest standards of safety in reactor design are doubtful.

Some reactor manufacturing companies are also likely to slip into the hands of some Chinese companies, raising concerns of national security.

Your office seems to respond to my letters in a routine manner, referring them to some junior officers of DAE without appreciating the seriousness of the concerns expressed. I would suggest that the CAG should accord the highest consideration to what I have been saying, as the public interest issues in this case are extremely important.

May I therefore appeal to you to consider these aspects urgently before the DAE makes financial commitments so that you may keep the Parliament appraised of the implications?

Yours sincerely,

E A S Sarma
Former Secretary to GOI

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