Russian reservations about the implications of India's nuclear liability law may be delaying the contracts for two nuclear power reactors to be built in Kudankulam, in the Tirunelveli district of Tamil Nadu.
“A decision has not been taken to accept liability,” said Georgy O. Kumani, vice-president of Atomstroyexport, Russia's state-owned firm to handle international nuclear projects, during a visit to its headquarters in Moscow. “From the point of view of the two companies, it is a very complicated issue. It is not easy to reflect in the contract documents,” he said.
Atomstroyexport, a subsidiary of the State-owned nuclear company Rosatom, is building two 1,000 MW reactors in Kudankulam in a collaborations with the Nuclear Power Corporation of India Limited (NPCIL), and is in negotiations to build more. Last year, an intergovernmental agreement pledged that four new reactors would be built at Kudankulam.
The first of the original reactors is undergoing final safety tests and is likely to start operations early next year after numerous delays to the original schedule. Construction work is mostly complete for the second reactor as well, which is likely to become critical within two years, according to the Atomstroyexport officials.
It had been hoped that the final contracts for the new set of reactors would be signed this year, with Russian president Dmitry Medvedev planning to visit India in the last week of December. However, Mr. Kumani's apprehensions indicate hurdles to be overcome before Russia will sign on the dotted line for the contracts to build the third and fourth reactors.
India's Civil Nuclear Liability Act, passed by Parliament earlier this year makes the supplier of a nuclear reactor liable in case of an accident. These “stringent provisions” have been opposed by the American companies, even while many Indian experts have argued against the Rs. 1,500 crore cap on financial compensation.
When asked whether the cost of the reactor would rise if the Russian firm's liability was increased, Mr. Kumani said, “The answer is obvious.” However, he then added that it was “too early to speak about the financial consequences” of the Act.
“We hope it will be resolved. We need to have resolution of the issue soon. We have to find a solution,” he said.
Meanwhile, the Atomstroyexport is also making efforts to “localise” its operations in India, initially by transferring equipment to the NPCIL. It is also enhancing collaborations with the Indian machine building industry, and is negotiating with Larsen and Toubro to set up a joint venture to manufacture equipment for nuclear plants. The venture could then be responsible for ensuring the supply of spare parts and replaceable equipment to the Kudankulam reactors.
