The Cabinet Committee on Security has cleared the decks for building two more 1,000 MW nuclear power units at Kudankulam by giving the go-ahead to the Russian offer of about Rs 40,000 crore for the project days before it lapsed.
The decision came right after the Department of Atomic Energy informed the government that the first reactor in Kudankulam would go critical this month. The movement on the project is also vital to the tough stand the Jayalalithaa government in Tamil Nadu has taken against protesters in a bid to meet its poll claims to improve the power situation in the state.
But Russia, sources said, has now conveyed that it would like to renegotiate the techno-commercial offer after India made it clear that the new civil nuclear liability law will apply to these reactors. There was confusion on this after the CCS clearance too, because India was under the impression that it was approving a Russian quote that came well after India’s stand on the liability law had been conveyed.
The Russian side gave a revised offer after the previous one lapsed last November. New Delhi presumed that this new offer, which was valid until March 31, would have covered the liability aspects of the deal since the quote had been increased.
But after India accepted this offer, the Russian side claimed that it had not factored in the liability cost since the Indian position had not been formally conveyed. This, sources said, has now been done and the matter has been discussed at the highest levels between Prime Minister Manmohan Singh and Russian President Vladimir Putin at Durban. Both leaders agreed that further details should be worked out without further delay.
At present, a Russian negotiating team is said to be in Mumbai, discussing the final offer with the Nuclear Power Corporation of India Ltd. The hope is that an acceptable price band can be identified within the confines of the existing offer, which entails a 70-30 debt-equity ration.
While NPCIL will provide equity of about Rs 12,288 crore, the remaining amount of Rs 27, 640 crore would be met via Russian state credit of Rs 18,132 crore and market borrowing of Rs 9,508 crore.
Russia had contended that the new liability law could not apply to Kudankulam 3 & 4 because they were grandfathered under the framework agreement for the first two units. This was, in fact, the argument Russia made before the Nuclear Suppliers Group when plans to build two more reactors first surfaced.
The irony is that this was also India’s claim before the international community, when the argument returned to haunt the Indian side after the passage of the liability law. As protests started in Kudankulam and petitions against the project were filed in the Supreme Court, options of any creative solution shrunk. The Attorney General too said that non-application of the law on units 3 and 4 could not be sustained when petitioners are demanding that it should even apply to the first two units.
The Indian Express
Apr 08 2013