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The complicated world of nuclear deals

Thursday 9 February 2006, by RAMACHANDRAN*Rajesh

Safeguards are only one of the fallouts from the Indo-U.S. nuclear deal. Several issues need to be considered before tying down the DAE’s hands.

INDIA’S VOTE on February 4 at the International Atomic Energy Agency (IAEA) in favour of referring Iran to the U.N. Security Council (UNSC), ensured that, on this count at least, the Indo-U.S. nuclear deal of July 18 would not die in the American Congress as Ambassador David Mulford had warned a fortnight ago. The other critical issue, that of separation of civil and military nuclear facilities, however, remains. The deal could die if India’s offer is not to the U.S.’ satisfaction.

The U.S. wants the Indian fast breeder programme, even in its present R&D phase comprising one 40 MWth Fast Breeder Test Reactor (FBTR) and the upcoming 500 MWe Prototype Fast Breeder Reactor (PFBR) at Kalpakkam, to be brought under IAEA safeguards. Atomic Energy Commission (AEC) chairman Anil Kakodkar has expressed his inability to do so (see The Hindu , August 12, 2005). He had argued that safeguards can be considered when the indigenously developed breeder technology matures and becomes commercial, but not in its present R&D phase. And since the Indo-U.S. agreement unambiguously states that India would bring in safeguards in a "phased" manner and "voluntarily," the Department of Atomic Energy (DAE) perceives the U.S.’ bid to tell India what it should put under safeguards as amounting to shifting the goalposts.

Since the demand is for separating civil from military, irrespective of whether they are R&D facilities or commercial, Dr. Kakodkar’s argument, on the face of it, does not seem convincing. What DAE appears to be really apprehensive about - as Dr. Kakodkar has more recently articulated - are the intangibles that come with safeguards and international inspection, including protecting its proprietary breeder technology. The need to interrupt the R&D process and seek approval of the IAEA whenever there is a change in design or process or material could be a cause for concern, as it requires sending details of the proposals to Vienna. According to DAE insiders, the experience with IAEA safeguards in India and elsewhere does not inspire confidence that sensitive information would be protected.

There is also a general sentiment of distrust of the U.S. - legitimate or not - in the DAE that runs down the rank and file of its scientific cadre. There could be historical reasons for this arising from the Tarapur experience but, while the Indo-U.S. nuclear deal is supposed to change all that, Washington has done little in the past to change that sentiment. For instance, the U.S. has shown no interest in resolving the Tarapur spent fuel issue. Even spare parts for the Tarapur plants were denied. These could have been done without any new deal.

Denial of a large number of nuclear related dual-use goods - controlled for non-proliferation reasons - to the DAE continues. Export of these does not violate any U.S. law or the guidelines of the Nuclear Suppliers Group (NSG). Of the 115 such goods, only 12 - the so-called NP2 items - were decontrolled in August 2005 for export to India as part of the Next Steps in Strategic Partnership (NSSP). In fact, this is the only tangible achievement of the NSSP so far. However, it is the mobile telephone companies that stand to gain more by the decontrol than the DAE as they can now import high-end oscilloscopes without licence.

The extent of exasperation evident in media commentaries, on the failure to conclude the deal before President George W. Bush arrives in March, is inexplicable. If there are crucial issues to be sorted out, let it take its normal course. If the DAE has genuine concerns, why force it? Why cling on to such a deal if it makes the DAE, and its scientists, unhappy?

It is also unfortunate that sections of the media have gone into DAE bashing mode, with intemperate language and derisive remarks about DAE scientists, on the one hand, and disinformation about India’s nuclear programme, on the other. It is strange that, even as the negotiations are still under way, they should overwhelmingly argue from the American standpoint rather than Indian. Notwithstanding the fact that the DAE could be faulted on many counts in its functioning or meeting targets, it must be remembered that if the U.S. is willing to talk to India today on near equal terms, it is because of what the scientists have achieved in the nuclear field. So deriding DAE’s scientists in this context will not get us anywhere.

One issue that the media never appear tired of hammering is the DAE’s failure to meet the target set in the mid-1980s of 10,000 MWe by the year 2000. The DAE achieved only 2720 MWe. The criticisms ignore the basic fact that the chief reason for the programme falling way behind the target was the grossly inadequate funding during the 1990s as against what was required (and even as compared to what the Plan had approved) for setting up new plants. Though R&D funding for the DAE has been substantive over the years, capital investment (at Rs.4 crore/MWe then) for new plants was never forthcoming. This was very comprehensively brought out by the Comptroller and Auditor General of India (CAG) in 2000. Indeed, it is this lack of government commitment to nuclear power that led to the closure of two operational mines at Jaduguda leading in part to the current shortage of natural uranium, the fuel for the indigenous pressurised heavy water reactors (PHWRs). The government in power during the period was that of P. V. Narasimha Rao and the Finance Minister was none other than Manmohan Singh. Is there a newfound commitment to nuclear power that is driving the Indo-U.S. nuclear deal or are there other considerations?

An argument often trotted out by the Government is that the deal will help India meet its short-term energy requirements. As will be presently argued, the deal has little to do with this. It seems to be driven largely by the hypothetical geo-political and other intangible gains, including being recognised as a nuclear weapons state, that the Government expects by getting admitted into the U.S. tent. But in the wake of the nuclear deal, India has only been forced to compromise on several issues including those related to country’s energy interests. Therefore, if the proposed separation fails to meet the U.S. benchmark and the deal has to die, let it die.

From the perspective of the DAE, the Indo-U.S. nuclear deal would be useful only to tide over the present temporary phase of shortage of nuclear fuel - natural uranium for the PHWRs and enriched uranium for the twin boiling water reactors (BWRs) at Tarapur. It is true that the PHWRs are being operated at 10-15 per cent lower capacity factors than their normal 80 per cent keeping in view the fuel availability for the 13 operational PHWRs as well as the five upcoming ones till the new mines in Jharkhand begin to produce the yellow cake. In any case, according to Dr. Kakodkar, the economic feasibility of a nuclear plant is based on 68.5 per cent capacity factor.

Unacceptable price

The DAE has maintained that if imported reactors come as a spin-off, they will only supplement the three-stage programme already in place and not supplant it. But such an additionality would be welcome only if the attendant costs, tangible and intangible, are not high. In the DAE’s perception, the price that is being demanded is unacceptable. At present, the generation capacity of a little over 3000 MWe accounts for just about 3 per cent of the total power generation capacity in the country. So a slight shortfall could not become such a critical issue for the national energy scene. By 2020, the PHWR capacity alone would be about 10,000 MWe, sufficient for getting into a self-sustaining breeder phase. According to DAE estimates, with a chain of breeders in place, a target of about 100,000 MWe should be achievable by 2040. This scenario is based entirely on domestic resources of uranium, its low grade ore notwithstanding (a fact that was known even when the programme began). Of course, potential new sites have been located and if exploited, the PHWR programme can continue alongside.

If the deal materialises, the minimum time any imported plant can take off in is 10-12 years: two year for site survey, three years for design approval by the Atomic Energy Regulatory Board (AERB), and 5-7 years for construction. Judging from the time taken by the Koodankulam plant since 1998 (when it was renegotiated), it could be longer. Only in the case of the recently identified coastal site in Ratnagiri, would the survey time be avoided. And if India opts for Russian VVERs, the AERB clearance time could come down as they have already gone through a design review. So the deal with the U.S. cannot really serve the country’s short-term energy requirements. And the self-sustaining breeder phase, which should get under way by 2025, if not by 2020, because of the mismatch between mining and the planned projects, promises to ensure long-term energy security.

Interestingly, no one is talking of the finances that would be required to install these imported plants at $1.5 million to $2 million per MWe. If there is this money available, over and above what is required for the DAE’s own roadmap, it would make more sense to let the DAE put up more PHWRs at lower costs (of Rs.6 crore/MWe) as well as speed up mining operations in new sites and also upgrade the centrifuge facility to meet Tarapur’s requirement of enriched uranium. Most importantly, do we have the necessary nuclear-skilled human resource that a rapid expansion with imported systems would require when the DAE itself is facing a shortage of expertise for the existing facilities? All these issues need careful consideration before tying down the DAE’s hands. Safeguards are only one, though significant, component of fallouts from the Indo-U.S. nuclear deal.

See online : The Hindu

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