India on power trip as nuke deal advances

Posted in India | 28-Jun-06 | Author: Siddharth Srivastava| Source: Asia Times

Undersecretary of State Nicholas Burns with Indian Foreign Secretary Shyam Saran.
The Indian nuclear deal cleared a major hurdle this week, with a US congressional panel endorsing the pact to share civilian nuclear technology with the South Asian nation.

The 37-5 vote in the House of Representatives' International Relations Committee was for enactment of laws to exempt India from US rules that contain nuclear exchanges with countries that have not abided by the international order on the issue.

India developed its nuclear-weapons program outside the Non-Proliferation Treaty (NPT), which it has refused to sign because of perceived bias in favor of countries that possess atomic bombs.

In a crucial step toward approval of the deal, the committee carried several amendments but rejected three by large majorities, including one that called for India to sign the NPT.

Despite the development, there is still a way to go. The deal was to go to the Senate Foreign Relations Committee on Wednesday, and reports suggest that, as in the House, this will translate into amendments in the language or rephrasing of a bill, after incorporating the views of all the members, without changing the essential spirit of the landmark agreement. The full House and Senate would also have to approve legislation and then reconcile differences between their bills.

The legislation is likely to add more substance to ensure that India remains committed to implementing strong export controls, separating its civilian nuclear infrastructure from its weapons program and placing civilian facilities under International Atomic Energy Agency (IAEA) safeguards.

The Times of India said, "The solidity of the House vote is being seen as an assurance that the Bush administration had lined up enough bipartisan support to get the deal past the barricades erected by non-proliferation hardliners, many of them suspected to be working at the instance of Islamabad or Beijing.'

New Delhi, for its part, is leaving no stone unturned to ensure that nuclear power is factored into the rising energy requirements of a growing Indian economy. Reports suggest that Washington and New Delhi are also working toward ensuring a statement in support of the deal at next month's meeting of the Group of Eight (G8) most industrialized nations in St Petersburg. This could build pressure on the Nuclear Suppliers Group (NSG) as well as cajole the hawks at the US Congress. The 45-nation NSG has made it clear it will await the Congress vote before making its own decision.

Tapping the G8 is a clever move, as the grouping does not include China, which is likely to be the main stumbling block at the NSG. Russia, France and Britain have openly supported the deal; New Delhi has been lobbying hard with Japan, Canada and Germany, which are now much more amenable. Italy, under a new left-leaning government, could cause problems, but is not likely to be as vehement as Beijing.

Getting India's house in order
However, regardless of what the US Congress thinks, India is going to make a big push for nuclear energy and reduce reliance on the very expensive fossil fuels. (India imports 70% of its crude-oil requirements.)

There is the fear that the nuclear pact will be delayed because of congressional preoccupation with domestic issues and elections this autumn. While launching an international bid, India is trying to ensure that its own house is in order.

The Indian government has drawn up an ambitious bid to garner 60 million tonnes per annum of equity oil from overseas by 2025 by empowering public-sector oil companies to enter exploration and production business abroad.

Last month, New Delhi announced that plans were being chalked up to double electricity production from nuclear power plants by 2030 with the possibility of international cooperation.

"We are trying to realize the target of 20,000 megawatts and scale it up to 40,000MW by 2030," said Anil Kakodkar, chairman of the government-controlled Atomic Energy Commission.

At the current level of 3,310MW, nuclear energy constitutes only 3% of the installed capacity in the country.

Recently, India's 16th nuclear plant went critical at Tarapur, while sites have been cleared by the government for four 700MW nuclear power plants (two each) at Kakrapar in Gujarat and Rawatbhata in Rajasthan. Once the 540MW Tarapur plant (the second pressurized heavy-water reactor) is synchronized to the western grid, the total installed capacity of nuclear energy will go up to 3,890MW. Pre-project work has begun at sites in Jaitapur and Kudankulam for four 1,000MW light-water reactors.

To provide nuclear power to eastern India, the government has in principle approved a 2,000MW plant in the impoverished state of Bihar. The Uranium Corporation of India Ltd is looking to increase domestic production of nuclear fuel in the states of Jharkhand, Andhra Pradesh, Meghalaya, Rajasthan, Chhattisgarh and Karnataka.

India's Nuclear Power Corp of India (NPCIL) has announced plans to spend US$1.2 billion on a stake in a uranium mine, taking on competition from China (India's main bugbear in oil auctions) and Japan. In an interview with Bloomberg News, NPCIL chairman S K Jain said recently that India had approached Australian and Canadian companies on a possible joint venture in uranium mining.

New Delhi is also working on amending the Atomic Energy Act (AEA) to allow private participation in nuclear-power production that has so far been the fief of only government agencies. Many private players including Reliance, Tata and US-based General Electric (GE) have expressed interest in building nuclear plants.

"We are working on moving forward to broadening of the [Atomic Energy] Act,' Kakodkar said recently.

Reliance Energy Ltd (REL) has approached the NPCIL with a proposal to set up nuclear-energy-based power projects. REL said possible nuclear cooperation between India and the US has opened new doors. Anil Ambani, chairman of REL, said the company is exploring the possibility of setting up a 2,000MW nuclear power plant. REL is already in talks with GE and Russia-based Atom Story Export (ASE) for possible joint ventures.

Indian industry is also expecting contracts of more than $600 million from the International Thermonuclear Experimental Reactor (ITER) project, a joint international effort to demonstrate the feasibility of fusion reactions for commercial power generation.

Experts say that to meet the revised targets, India will have to build at least 30 more reactors and spend more than $40 billion in the international market. The US estimates that overall business worth more than $100 billion can be generated if the Indian nuclear deal goes through, with companies such as France's Areva SA, Electricite de France and the United States' GE and Westinghouse Electric Co as well as ASE benefiting immensely.

More than $200 billion may be spent on the plants worldwide by 2030, according to the International Energy Agency in Paris.

In this context and in keeping with the realities, the Indian Embassy in Washington has signed for more than $1 million two lobbying firms to "sell the deal" to the US Congress. Last month Foreign Secretary Shyam Saran met with US Under Secretary of State Nicholas Burns in London to review the agreement.

In a major boost to India, the head of the IAEA, Mohamed ElBaradei, recently urged the US Congress to endorse the Indian nuclear-energy deal, which seeks to lift a 30-year-old ban on India, as it is not a part of the non-proliferation regime. India has agreed to open its civilian installations to IAEA inspection.

Siddharth Srivastava is a New Delhi-based journalist.