Russia to sign three key pacts for Kudankulam units 5 & 6 this month

Russian companies will sign three key agreements with Nuclear Power Corporation of India Ltd for Kudankulam units 5 and 6, by the end of this month, said Sergey Orlov, who heads the India operations of Atomstroyexport, one of the Russian companies engaged in the construction of nuclear power projects.

The ‘long manufacturing cycle equipment and first priority equipment agreement’ would give the go-ahead to the Russian companies to begin production of key equipment such as reactor pressure vessels and steam generators, which take long time to manufacture.

The other two agreements are called ‘first priority designing’ and ‘contract for working documentation’ and are, like the first agreement, essential foundational agreements for starting the projects. The three agreements follow the signing of the ‘general framework agreement’ between NPCIL and its Russian counterpart, Rosatom, on June 1, 2017. Addressing journalists here, Orlov said Russia’s intention was to “start construction work on one unit each year” for the next four years. The ‘first pour of concrete’ for Unit 3, a milestone event in the construction of a nuclear power plant, happened on June 29. It would be another 69 months before electricity starts flowing out of the plant. Units 4, 5 and 6 would follow in the next three years, and accordingly the four units would be commissioned in the years between 2023 and 2026, Orlov said. Each unit, like units 1 and 2 at Kudankulam which are generating power today, is of 1,000 MW capacity.

India’s Civil Liability for Nuclear Damage Act (or ‘nuclear liability law’) seems to have scared away foreign nuclear reactor suppliers such as GE, Areva and Westinghouse, because it is perceived to be imposing an unlimited liability on the supplier if there is an accident arising out of a defect in the equipment. Experts have observed that the Indian liability law is very different from similar laws in other countries, which limit the suppliers’ liability.

Asked how the Russians would deal with the Indian nuclear liability law when other countries could not, Orlov said the Russians had been monitoring the evolution of the Indian law in close consultation with lawyers and had seen it “evolving to be more realistic.” While disclaiming any expertise in the matter, because “I am not a lawyer”, Orlov observed that there was a cap on the liability and an insurance pool had been created. But above all, he said Rosatom was owned by the government of Russia and “so we have all the guarantees and back-up of the Russian government.”

The units 3 and 4 are estimated to cost ₹39,747 crore ($6.2 billion), compared with ₹20,962 crore for units 1 and 2. Orlov disagreed that the doubling of the costs was mainly because of the ‘nuclear liability’ issue, as some foreign experts have suggested, but was due to general inflation. Units 1 and 2, he pointed out, were signed for a long time ago. The World Nuclear Association estimates the cost of power from units 3 and 4 to be ₹3.9 a kWhr.

According to the inter-governmental agreement between India and Russia, the Russians will also build six more units, of 1,200 MW each at a different site that will be selected by India. Earlier, Haripur in West Bengal was being considered, but after local protests, a site in Andhra Pradesh is being assessed.

Orlov said NPCIL wishes to sign agreements for all the six units in one go, rather than in sets of two, as in the case of Kudankulam units. Noting that it was “a major option for the new sites” Orlov said signing one agreement for six units will help shorten the time for negotiations and enable the Russians to deal with manufacturers for serial production.

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