Friday, March 21, 2014

Crimea loses, India wins

The conditions are indeed favorable at this point.

India desperately needs to make nuclear energy work and the Russians are passionate about friends (apart from say...Syria) who look the other way.

India and Russia are set to sign the much delayed techno-commercial agreement for Kudankulam 3 and 4 reactors later this month. Government sources said all differences, resulting from India's contentious Civil Liability for Nuclear Damages Act, 2010, had been taken care of with Moscow finally agreeing to bring the pressurised water reactors under the purview of the law.

Russia had until now maintained that the liability law, which makes suppliers of equipment financially accountable in the event of an accident, was a recent and an unnecessary invention in its civil nuclear partnership with India.

Unlike Kudankulam 3 and 4, the first and second Kudankulam units will function independent of the liability law. Fearing that allowing the same concession for the third and fourth units could lead to similar demands from other countries, India had officially conveyed to Russia in 2012 that both the units will have to operate under the liability law.

Russia had responded by saying that that the 2010 law was not in keeping with the spirit of the 2008 civil nuclear cooperation agreement between the two countries and that the cost of the supplied equipment would increase significantly if the suppliers were made accountable. .....Russian deputy PM Dmitry Rogozin had said, "If the supplier is to bear additional financial responsibility for hypothetical damage, then the price of the supplied equipment will increase, naturally." 

India and Russia had in 2013 signed an agreement for a $3.4 billion Russian line of credit for the reactors. The cost for the two reactors is expected to be more than $7 billion.

The agreement, however, was not delayed only because of the liability issue. At one stage, the UPA government deliberately slowed down negotiations as it waited for protests in the coastal town against nuclear reactors to subside.  

PM Manmohan Singh told then President Dmitry Medvedev during his visit to Russia in March 2012 that the agreement would have to wait "until the conditions became favorable."


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