End of a Nuclear Pipe Dream

THE outcome of the Indo-US nuclear deal is now in total disarray.  The nuclear deal was used to cement the strategic alliance between the United States and India.  At the heart of the deal was the promise of full civilian nuclear cooperation extended to India and the quid pro quo was the military alliance coveted by the US which included the purchase of US arms. There was also an overarching framework whereby India’s foreign policy would be dovetailed to US strategic interests on issues such as isolating Iran. 

The Manmohan Singh government, while negotiating this iniquitous deal, had also committed to buy 10,000 MW of nuclear reactors from US nuclear power companies.

Ten years later the false premises of the nuclear deal have been exposed. India was denied access to the enrichment and reprocessing technology by the Nuclear Suppliers Group. The plan to import a large number of nuclear reactors from the United States and France is in jeopardy. 

Westinghouse, the US nuclear company owned by Toshiba, has declared bankruptcy. The UPA government had agreed for Westinghouse to set-up six AP1000 nuclear reactors in India. Under the Modi government, a preliminary work agreement was signed between the Nuclear Power Corporation of India and Westinghouse to build two reactors in Kovvada in Andhra Pradesh. Eventually, six reactors were to be situated at Kovvada. 

With Westinghouse declaring bankruptcy, the prospects of the Kovvada project have become doubtful.  Even though the US Embassy in India and the Company have assured that the project will go ahead, the fact is that Westinghouse is saddled with enormous problems with the AP1000 reactors that it is setting up in the US and China. As of now, there is no single reactor of this type in operation anywhere in the world. For the Modi government to go ahead with a project involving billions of dollars with a bankrupt company will be extremely foolhardy. 

It is not only the Kovvada project which is in jeopardy.  The Jaitapur project in Maharashtra, where the French company Areva has been contracted for supplying six EPR reactors of 1,650 MWs each, has also run into serious difficulties.  During Prime Minister Narendra Modi’s visit to France in April 2015, two agreements were signed between Areva and NPCL and Larsen & Toubro respectively for the construction of these reactors.

However, within months of these agreements, Areva announced big losses amounting to 4.8 billion Euros.  The French government, which owns Areva, declared that the company would be broken up and the nuclear division would be sold to another French energy company EDP, which is also State-owned. Areva too has been struggling to complete the setting up of reactors in Finland and France which have run into long delays and huge cost overruns.

The CPI(M) had, during the nuclear deal, pointed out the folly of going in for imported nuclear reactors which are exorbitantly expensive. But Manmohan Singh government declared its delusionary plan to set-up 20,000 MWs of nuclear power by 2020. 

While this fiasco has occurred on the nuclear front, the original purpose of the United States to entangle India in this deal has been fulfilled.  The US has become the biggest supplier of arms and defence equipment to India. The military alliance has burgeoned. The Modi government has carried forward this military collaboration by signing the Logistics Exchange Memorandum of Agreement (LEMOA). What happened with the India’s stand on the Iran nuclear issue is now a shameful part of the history of this deal. 

The Modi government had embraced fully the bankrupt legacy of the Manmohan Singh government on the nuclear deal. Now faced with the financial bankruptcy of Westinghouse and Areva, it will have no choice but to cancel both the Kovvada and Jaitapur agreements. Not doing so would mean robbing the people for a nuclear pipe dream. 

(April 5, 2017)

Newsletter category: