Power tariff from Kudankulam will be lower than any future foreign N plant in India: Russian ambassador
Alexander M Kadakin first landed in New Delhi in 1971 to serve at the Embassy of Union of Soviet Socialist Republics. The young diplomat immediately fell in love with India. He learnt Hindi and developed keen interests in the people and culture of India.
Over the next four-and-a-half decade, Kadakin had the unique privilege of witnessing Moscow-Delhi ties growing from a “sincere friendship” in early 1970s to what is now a “Special and Privileged Strategic Partnership”. He was the Deputy Chief of Mission at the USSR Embassy in New Delhi, when the union dissolved on December 26, 1991.
He, however, continued on the same position at the mission that was renamed as Embassy of Russian Federation. He was the Ambassador
Extraordinary and Plenipotentiary of Russia to India from 1999 to 2004 and returned to the same position in October 2009.
In an interview to Anirban Bhaumik of Deccan Herald, Kadakin, who is as fluent in Hindi and Urdu as he is in Russian and English, shares his views on Moscow’s relations with New Delhi, particularly on prospects of nuclear and defence cooperation as well as trade and economic ties.
How do you view the future of India-Russia nuclear cooperation in the wake of the “Strategic Vision for Strengthening Cooperation in Peaceful Uses of Atomic Energy” issued by Prime Minister Narendra Modi and President Vladimir Putin in December? What are the differences between India’s nuclear cooperation with Russia and that of New Delhi with the United States and other countries?
Russia is so far the only on-ground partner which in deeds and not in words is contributing to India’s peaceful nuclear programme. Russian-Indian cooperation in this field is long-term and time-tested. Russian-designed nuclear power plants in India are equipped with the state-of-the-art safety features including those added after the Fukushima tragedy.
The Strategic Vision of our nuclear cooperation, signed at the annual summit of President (Vladimir) Putin and Prime Minister (Narendra) Modi last December, envisages construction of at least 12 units. It provides for cooperation in the nuclear fuel cycle, scientific and technical sphere and in alternative application of the atomic power (medicine, agriculture, etc.). Effective legal framework for a serial construction of reactors and further expansion of Russian-Indian cooperation in this area is based on mutual respect for the national laws of the two countries and their international obligations.
The major difference between Russia and other countries in this segment of cooperation with India lies in one very simple fact which is louder than many words. Unit 1 of Kudankulam NPP (nuclear power plant) is already producing energy for consumers and the second one will be commissioned soon. Agreement has been signed for the construction of Units 3 and 4. As regards other potential projects, not a single nail has been driven so far in any of the construction sites. We hear only about intentions and promises, while India, with its requirements of energy for sustainable progress, cannot allow itself the luxury of wasting time!
Our Indian friends are completely satisfied with Russian-designed reactors, which seem to be the best in terms of quality, safety, ecology and, what is more, cost of energy. Russian-Indian interaction in this area could be considered a model for cooperation for others to follow.
Russia too had certain concerns over India’s Civil Liability for Nuclear Damage (CLND) Act, particularly on the applicability of the Act on the 3rd and 4th units of the Kudankulam Nuclear Power Project in Tamil Nadu. Could you please share with us how India addressed the concerns of Russia and what did finally make Russia accept applicability of CLND Act of India on the new units of KNPP as well as the future units to be built by Russia in India?
Our cooperation in the construction of Units 3 to 6 of Kudankulam NPPs is based on the 2004 inter-government agreement, which stipulates the absolute liability of the operator in strict conformity with the international legislation. However, the experience gained by our Sides during several decades of cooperation has enabled us to work out a mutually acceptable resolution of the legal dilemma caused by some unspecific text in the CLND Act 2010. We managed to meet the requirements of the national legislations, to continue cooperation in strict conformity with the bilateral 2008 inter-government agreement and the international obligations of the two sides.
Why did Russia agree for technology transfer in its nuke cooperation with India, including manufacturing of spares and components in India? The US and other western countries have been reluctant to transfer technology to India in the field of civilian use of nuclear power, pointing out that India has not signed the Nuclear Non Proliferation Treaty and the Comprehensive Test Ban Treaty?
The core is the unique character of Russian-Indian special and privileged strategic partnership based on the highest level of mutual trust. No other country but Russia shares with India cutting-edge technologies. The rationale is simple – we are friends, and it covers all questions. As I have mentioned, the two sides agreed upon a serial construction of Russian-designed Units of NPPs in India. Should we maintain the serial approach, technology transfer and industrial localization becomes viable, including manufacturing of spares and components in India.
It is the best proof that we have since long adopted Prime Minister Modi’s clarion call – ‘Make in India!” We do want India to become a prosperous global power and have been doing all we can for this purpose starting from the now historic Bhilai steel project. As regards other countries or some newly acquired partners, should I remind you of all kind of sanctions clamped on India in a not far-away past?
Do you think power produced by KNPP units would be cheaper than the power to be generated by future plants to be set up by other foreign companies? Why?
One of the best aspects of our cooperation in peaceful atomic energy is maintaining the most competitive tariff for the electricity generated by Unit 1 of Kudankulam NPP, at Rs 3.5 per kWt/h. It is at least twice lower than the projected tariffs for all other foreign projects, excluding the insurance scheme. We have no reasons to expect the tariff for the second series of KKNPP to be much higher. It is to be noted that the cost of the Russian supplies, services and, consequently, the tariff have not increased either upon incorporation of new technical requirements after the Fukushima tragedy or after CLND Act 2010.
The allocation of the Russian State Credit for the construction of the Units 1, 2, 3 and 4 of the KKNPP is yet another important feature. It is to be emphasized that regardless of the time, which elapsed since the allocation of the credit for the first two Units, the Russian Federation has kept the same terms and conditions of the credit for the Units 3 and 4, as was requested by the Indian Government. This factor also helps the Indian Side to keep the economic parameters of our project at a competitive level.
At the same time, let me make it clear: Russia does not want to grab monopoly in this strategic area. The Indian market is so huge that there will be enough room for other contract seekers. Ultimately, it is the price India is willing to pay for nuclear power that matters.
How do you think President Putin’s recent visit would help to boost defence ties between India and Russia? India has concerns over Russia’s move to strengthen its defence ties with Pakistan, particularly Moscow’s plan to provide military helicopters to Pakistan. How can Russia address the concerns of India?
The annual Russian-Indian summit last December was very productive. More than 50 agreements in a number of spheres of bilateral cooperation were signed, including defence and energy.
As for the proposed helicopters deal issue spread around by media, yes, Pakistan has shown interest in purchasing military equipment from Russia, but the negotiations on this matter are at an initial stage. It has been reaffirmed time and again by Russian officials at all levels, including President Putin, that Russia will never do anything detrimental to the interests of her sister India. Respect for India’s interests, particularly its security concerns, has always been one of Russia’s top-most priorities.
Could you please update us about India-Russia joint projects for development of Fifth Generation Fighter Aircraft and Multirole Transport Aircraft?
The two sides are holding intense talks on terms and conditions for these two projects. The results of negotiations will be known in due course. Let me assure you that Russia attaches high importance to cooperation with India in this field and hopes it will contribute significantly to the implementation of “Make in India” drive launched by Prime Minister Narendra Modi.
Can you please tell us about Russia’s participation in Aero-India 2015 and Russia’s future plan for cooperation with India in the aviation sector? Russia also offered to manufacture advanced military helicopters in India with provisions of exports. When do you think such a project can take off?
A total of 41 Russian companies are attending Aero India 2015 in Bengaluru and they include hi-tech corporation Rostec, arms seller Rosoboronexport, the Almaz-Antei conglomerate, which produces S-300 and S-400 air defense systems, Russian Helicopters rotorcraft producer, the United Aircraft-Building Corporation and the Sukhoi, MiG and Irkut civilian and military aircraft manufacturers.
The Russian-Indian joint venture BrahMos Aerospace will feature full-scale models of its BrahMos-A supersonic cruise missile scheduled to be test-fired from a Sukhoi Su-30MKI (Flanker H) multirole fighter in March, and a smaller copy of its future Brahmos-2 hypersonic missile.
Aviation occupies a special place in bilateral relations. Up to 70% of the equipment of Indian Air Force is Russian-made. Our aviation industry is eager not only to maintain this priority but also to make Russian-Indian cooperation in this field much stronger.
The Ka-226T helicopter project may serve as an example of our complete readiness to move forward with the latest and the best of Russian military technologies for the benefit of India’s security. In such case you will not worry about several helicopters proposed to be sold to your immediate neighbor! You will produce much stronger machines here! The offer was made during the recent visit of Vladimir Putin to India and later reaffirmed by the Russian Defence Minister Sergei Shoigu during his visit to India one month ago. The Russian side has already conducted presentation of the project to our Indian partners and the negotiations are in progress.
Do you think that India can successfully manage an economically beneficial relationship with the US and a historical relationship with Russia in light of the recent and escalating tensions between Washington and Moscow? How do you view India’s position on the situation in Ukraine?
Well, it’s not for Russia to tell India, a super power in the making, who to make friends with. Our relations remain not only romantic, with the ever-green motto of Hindi-Rusi Bhai-Bhai still functional, but are also mature enough not to give way to any kind of adolescent-type jealousies.
India’s heart is big enough not only for Russia. The recent statement of the Indian Ministry of External Affairs gives a crystal-clear message: Russian-Indian special and privileged strategic partnership is here to stay, and everybody knows that. We highly appreciate India’s balanced and objective approach towards the latest events in Ukraine and the necessity of an inclusive dialogue in that country and peaceful resolution of the conflict. The Kiev authorities should keep their promise to launch a nation-wide dialogue among all parts of that country.
India-Russia trade is still far below potential. How do you think India and Russia could boost bilateral trade?
Bilateral trade volume is a matter of our deep concern. In recent years, we have witnessed some improvements in the situation, with export and import indicators demonstrating a slow, but steady increase. In 2013, the bilateral trade reached about $10 billion. Most probably, the numbers for 2014 will be roughly the same. Of course, for countries like India and Russia, it is peanuts.
Boosting Russian-Indian trade cooperation was high on the summit agenda last December. Immediate measures are needed to diversify bilateral trade, promote investments and encourage private and state-run companies to closer cooperation. President Putin and Prime Minister Modi set a target to raise trade volume up to $ 30 billion by 2025.
There exists a strong commitment of Moscow and Delhi to eliminate major impediments in this sphere. We have agreed to work out a mechanism that would allow us to use national currencies in mutual payments. We carry on our efforts to build a reliable and effective transport infrastructure between Russia and India – the North-South Multimodal Transport Corridor.
Once implemented, it will considerably reduce the time of delivery of goods and cost of shipment. Ultimately, we are moving towards creating a Free Trade Zone between India and the member-states of the Eurasian Economic Union.
A joint bilateral working group on the India-EEU Agreement on Comprehensive Economic Cooperation has been set up and will start working shortly. Updating the Russian-Indian agreement on mutual protection and encouragement of investments will also give a positive signal to our business communities.
During the summit, a solid package of economic agreements was signed, which will imminently lead to increase of our trade in the near future. These are: inter-governmental programmes in promoting cooperation in oil and gas and a strategic vision of strengthening cooperation in the peaceful use of nuclear energy; long-term export contract between Rosneft and Essar Oil Ltd. for oil supply amounting to $ 5 billion per annum; $ 2.1 billion contracts between Russian ALROSA and Indian companies for supplying uncut diamonds; NMDC’s memorandum on the purchase of shares of Russian Akron Company to develop a potassium fertilizer deposit estimated at $ 700 million. Taking these facts into consideration, I am convinced that we can expect a significant boost in the volume of trade in the years to come.
Anirban Bhaumik, Feb 19, 2015, Deccan Herald