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Doubts that American nuclear companies will sell reactors to India

IS THE INDIA NUCLEAR AGREEMENT REALLY THE ‘BREAKTHROUGH’ OBAMA PROMISED? Chauthi Duniya, March 20th, 2015 Analysts and experts familiar with the negotiations say that the legal issues remain so complex that private U.S. companies may continue to shy away from new deals in India,….

The Indian Government has already slated sites for nuclear power facilities for Westinghouse Toshiba in the western state of Gujarat and GE Hitachi Nuclear Energy in the state of Andhra Pradesh. “My feeling is that there’s not as much there,” said Daryl Kimball, executive director of the nonprofit Arms Control Association, a non-proliferation watchdog group. “The real test is, will GE or Westinghouse say ‘this is good enough for us’ or not and whether they will sign contracts.”…….

The key issue will be whether the conflict between international law and Indian law can be waved away by a memorandum from India’s Attorney General. The memorandum would have to say that the 2010 liability law “doesn’t mean what it says,” said a Washington lawyer familiar with the issues but who asked for anonymity to protect his professional relationships. “The fear is that the U.S. Government will say this is good enough,” the lawyer added. “Even if the [Indian] Attorney General comes out with a memorandum saying the law doesn’t apply to suppliers, that’s not binding on Indian courts.” The second obstacle has been the requirement in the Hyde Act of 2006 that the Indian Government and an independent auditor annually provide information about the form, amounts and location of any uranium supplied to make sure it is not diverted for military use…….

India is a special case — and non-proliferation experts have special concerns about it. India’s first nuclear reactor dates to 1956; it now has 21 reactors at seven power plant sites. The United States and Canada withdrew support of the nuclear program after the country tested nuclear weapons in 1974, and the United States and Japan imposed sanctions after the 1998 tests. Members of Congress will want to make sure that India cannot skirt the Bush-era legislation and that India did not simply wear down American negotiators.

To get this contentious issue off the table, the Administration simply signed off on the same measures taken by India that the Administration had previously said were unacceptable,” said House Foreign Affairs Committee Chairman Edward R. Royce (R-Calif.) in a statement. He took aim at the liability side of the agreement too, saying, “India has still not met its commitment to give U.S. companies the protection against unlimited damages that they need to do business there.”

Meanwhile, as India’s economy has grown, nuclear power has provided a tiny portion of its power generating capacity — just 2.5 percent…….

the energy landscape is changing rapidly. Solar power, for example, is becoming cheaper and easier to launch than a nuclear power plant. Modi’s Government recently announced an ambitious plan to expand solar capacity to 100 gigawatts by 2020. Even if the thorny details of the liability question are worked out — a big “if,” analysts say — American companies still face the political realities of India……..the plants remain unpopular with local residents and land acquisition can take years.

M.V. Ramana, a researcher at Princeton University who has written a book about India’s nuclear industry called “The Power of Promise,” said importing nuclear reactors from America may be an expensive choice. Ramana studied the costs of electricity at a proposed French-backed nuclear plant that would be built on India’s western coast and found that the electricity rates could be three times as high as those tied to other forms of energy. “There is going to be a huge economic challenge,” Ramana said. “How can they make electricity affordable?” In the end, M.K. Bhadrakumar, a former Indian ambassador and analyst, said the “breakthrough” touted by Obama and Modi may well end up being more of a diplomatic success than a commercial one. “It was a sensible thing because the next time Modi meets Obama they don’t have to talk about something they are not going to resolve,” Bhadrakumar said. “They set it aside. It was creating bad air.”

(Mufson reported from Washington.) (Annie Gowen is The Post’s India bureau chief and has reported for the Post throughout South Asia and the Middle East.) (Steven Mufson covers the White House. Since joining The Post, he has covered economics, China, foreign policy and energy.) – The Washington Post  http://www.eng.chauthiduniya.com/is-the-india-nuclear-agreement-really-the-breakthrough-obama-promised/

March 21, 2015 - Posted by Christina Macpherson | business and costs, India, politics international