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Is the nuclear deal about big business?
A N Prasad
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July 15, 2008

Keeping the debate on the merits of the Indo-US nuclear deal aside, there are other aspects not discussed so far which need some attention.

At a time when the global nuclear industry is somewhat dormant, India's ambitious plans to increase power generation capacity substantially through the nuclear route has come as a shot in the arm for nuclear suppliers who are looking for big money and to revive their industry. The role of big business firms in the US to lobby actively in getting the legislative changes incorporated in the US law to facilitate trade with India is well known and the Indian industry has not lagged behind in matching these efforts to get their share of the pie.

Weeks before US Congress passed the Hyde Act, American companies came looking for prospective clients in India's huge energy market. The largest trade mission from the US to any country came to Mumbai in November 2006 and 30 of its 250 members represented 14 American firms in the nuclear sector. The US Business Council is reported to have said at least $100 billion (about Rs 400,000 crore) worth of investment will be needed to develop nuclear energy in India over the next 20 years. The government which was originally targeting 20,000 MW of nuclear power by 2020 is now talking of doubling it to 40,000 MW. India seems to be under the impression that phenomenal increase in nuclear power generation could at least partially checkmate the rising oil prices.

While all this could prove to be wishful thinking, it is pertinent to consider some of the realities. In India there are some conventional power plants lying idle owing to economic considerations. As an example, the controversial Enron plant at Dabhol in Maharashtra is shut down due to high cost of power resulting from spiralling cost of naphtha.

In the context of the present Indo-US nuclear deal it is difficult to hazard the cost of power with the volatile cost of uranium. This could well be administered with the suppliers forming an OPEC (Oil Producing and Exporting Countries)-like cartel with India having no say like in the case of oil. India cannot afford to be insensitive to the impending high cost of power generation under uncertain conditions which may have a telling effect on inflation, more so when high cost of power could well be subsidised to sectors like agriculture. In a hurry to go for the nuclear deal in a big way we could well be trapped with international commitments in perpetuity without matching benefits. It is not known how far this aspect has gone into the decision making process.

With the target figures for nuclear power generation being revised upwards perhaps to attract big business interests, it is a matter of concern whether serious feasibility studies have been done in fixing the ambitious targets. In view of the embargoes since 1974, nuclear development in India has progressed at a steady pace, though slow, but on a strong foundation backed by solid research and development carried out in some of the premier R&D institutions like the Bhabha Atomic Research Centre. None of the targets fixed periodically for power generation in the past have been met for one reason or other. The build-up of infrastructure including industry, trained manpower for design, construction, operation and maintenance and so on has gone on in line with the growth.

Expertise in regulatory aspects has also been developed steadily to meet requirements. However, when there is a large influx of reactors pumped in from different countries with different designs through this deal lured by billions of dollars, there is every possibility of slip-ups in safety and regulatory functions.

God forbid, if this results in any mishap the nuclear industry could get a heavy beating not only in India but also globally. One should guard against repetition of history like Three Mile Island and Chernobyl. This is a serious matter because the Atomic Energy Regulatory Body in India still depends heavily on the expertise and experts from the very nuclear establishment they are mandated to regulate! Similarly, selection of sites, environmental safety assessments and public hearings could slow down the process and any short-cuts could prove detrimental in the long run.

The whole nuclear deal is caught in an ugly debate over the long term national interest. While there are varied perceptions attached to this and rightly so, most of the problems have arisen because of the issues extraneous to simple nuclear cooperation as is evident from the Hyde Act.

There is a strong feeling among many of the nuclear scientists and others that once India is brought under the thumb of international community by heavy dependence on imports, making them constrained not to take bold independent decisions in the future for fear of adverse economic fallout. US law provides enough scope for arm-twisting, particularly after heavy investments by India. This and other issues of concern need to be properly addressed.

A N Prasad is former director of the Bhabha Atomic Research Centre 

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