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Looking DC,talking Tokyo

The lack of a bilateral agreement with Japan is stalling the sale of nuclear reactors from ‘American’ companies like Westinghouse and GE-Hitachi.

Written by Ashok Parthasarathi |
September 5, 2011 1:06:18 am

Towards the conclusion of the Indo-US nuclear deal in 2008,the Indian government issued letters of intent to the US,French and Russian governments for their companies to sell 10,000 MW capacity of reactors to the Nuclear Power Corporation of India Ltd (NPCIL) over a period of time to be negotiated. The government of India (GoI) also allocated sites for those foreign companies to set up their reactors.

It is as a result of the above process that Russia was to set up four more 1,000 MW power plants at Koodankulam (where two such plants have been under construction for the entire past decade,one is to be commissioned this year and the other in 2012) and four additional Russian reactors of the same capacity are to be set up in Haripur in Bengal. Similarly,six 1650 MW reactors made by the French firm Areva are to be set up at Jaitapur in Maharastra,starting with two that will be operational by 2017-2018. As for the 1,000 MW reactors made by US firms Westinghouse and the US-Japan joint venture GE-Hitachi,all that has been agreed so far is that they will be set up in Gujarat and Andhra Pradesh. No specific sites have been decided on as yet.

And thereby hangs the following tale. Westinghouse is owned 100 per cent by the Japanese firm Toshiba and in the GE-Hitachi joint venture,60 per cent is owned by Hitachi. Under Japanese law,such firms with majority Japanese equity can sell their reactors only to countries that have signed a bilateral nuclear cooperation agreement with the Japanese government,and after that agreement has been ratified by the Japanese parliament.

Accordingly,the GoI and the Japanese government have been negotiating for the last 18 months towards a bilateral nuclear cooperation agreement. As many as four rounds have been held,but practically no progress has been made.

Why? Basically,it is because of Japan’s long standing anti-nuclear position (despite itself having set up 53 civilian nuclear power reactors),that any country with whom Japan signs a bilateral nuclear cooperation agreement must have signed the Nuclear Non-Proliferation Treaty (NPT) and the Comprehensive (Nuclear) Test Ban Treaty (CTBT). It has been India’s strong and longstanding national policy not to sign either of those treaties.

A consequence of this fundamental disagreement has been that the Japanese government has now indicated that it is suspending negotiations with the GoI. This is a very serious development for the US because it means both its nuclear reactor manufacturers,Westinghouse and Hitachi-GE,cannot get a slice of the potential $150 billion Indian nuclear reactor market,while its competitors,Russia and France,steam ahead.

Who is going to cut this Gordian knot,and how? That is the multi-million dollar question. It is ironic that while “American” nuclear reactor suppliers,that is,those operating from US soil like Westinghouse and GE-Hitachi,are unable to ship reactors to India,the US government is pressing the GoI to amend our civil nuclear liability law to give US reactor suppliers “a level playing field” vis-à-vis their French and Russian counterparts. When the US government is confronted by GoI with the fact that both the French and Russian governments and their companies have clearly informed GoI that they have no difficulty whatsoever with our liability act and do not require GoI to ratify the international Convention on Supplementary Compensation (CSC) (which GOI has already signed),and the US government alone is pressing GoI to undertake such ratification,the US has no answer. When GoI reminds the US government that even if it were to ratify the CSC,the lack of a bilateral nuclear cooperation agreement with the Japanese government would continue to prevent the sales of nuclear reactors by Westinghouse and GE-Hitachi,the US government has even less of an answer! It is time the GoI put the US government in its place,given this unreasonableness.

The writer was science and technology adviser to Indira Gandhi and secretary of several major scientific departments of the GoI

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