The Hindu Business Line : Reality check on nuclear option

To the strong pitch the Prime Minister, Dr Manmohan Singh, has been making for the nuclear deal, the Congress President, Ms Sonia Gandhi, has added her own formidable voice.

Writing in the party organ, Sandesh, she has extended unequivocal support for the nuclear deal on the standard argument of the rising demand for power to sustain the needed economic growth. She goes on to make a couple of curious as sertions that do not bear scrutiny. She has congratulated the Government’s ‘able negotiators’ on hammering out the deal. Well, the mess in which the negotiators have landed the country does not point to any ability or competence having been at work.

She also says that throughout the negotiations with the US, Parliament, the UPA, the Left parties and the Opposition had been kept informed. If so, why all the furore ever since the finalised agreement was published? Does Ms Gandhi want to imply that the Left and the Opposition are acting irresponsibly?

Dr Singh has talked of the importance of India becoming part of a ‘nuclear renaissance’ that is being witnessed round the world.

What is good for the goose is not necessarily good for the gander. Nuclear power is never going to be any more than a marginal component of India’s energy mix. Going by the track record of Atomic Energy Department and the Nuclear Power Corporation, there is absolutely no chance of having on the ground 40,000 MWs by 2020 as fondly hoped for by the Prime Minister.

In fact, expert estimates have never assumed more than 20,000 MWs in the next two decades. By that time the total installed capacity from all sources of power might be around 250,000 MWs (or doube what it is today), of which the percentage of nuclear power might come barely to 10 per cent or less.

‘Uranium shock’

All this rests on two vital assumptions: The first is that supplies of fuel, equipment and technology envisaged in the miscalled 123 agreement will proceed without a hitch. Dr Singh bases his optimism on this score on the ground that India will not be dependent on just one country, but will be able to diversify its sources to include the countries of the Nuclear Supplies Group (NSG). To count on the NSG taking a line independent of the US will be foolhardy. When it comes to the crunch and the US, for reasons of its own, takes a hard line, the NSG will begin wobbling, and India will be left high and dry.

The second assumption is that India will be able to marshall the financial and infrastructural resources on a scale commensurate with the targeted construction. Taking into account transportation costs, the installation fee, maintenance and service charges, and the like, as on date, a megawatt of nuclear power takes a minimum of Rs 10 crore to build, and allowing for inflation and rise in administrative and material costs, it may well exceed Rs 15 crore by 2020. Which means that in order to build 20,000 MWs India needs to allocate Rs 300,000 crore, at the rate of Rs 15,000 crore per year, for the next 20 years. Even if the private sector gears itself to supplement the Government’s effort (a big ‘if’ considering the evidence of the interest shown so far), mobilisation on such a massive scale is extremely problematic.

Adding to the already astronomical burden is the looming ‘uranium shock’. It has become a speculative commodity in the international fuel market, and there are incipient signs of emergence of cartels of which the NSG itself may well become one. This will throw the entire nuclear planning out of gear. How prepared for these contingencies is India?

B. S. RAGHAVAN

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