Among political parties in India only the CPI(M) has expressed its skepticism on the issue. Commenting on the agreement reached between India and the US, the CPI(M) pointed out in a statement that the proposed construction cost of the nuclear power plants would be $42 billion. ‘The cost of power (generated there) would be unsustainable for India,’ according to the statement. In this context, it referred to similar fears expressed among Indian circles over the cost of generation in the proposed French nuclear reactor at Jaitapur in Maharashtra.

Interestingly, news of the Indo-US agreement has evoked international interest as well. A Russian website has gone somewhat deeply into the matter. It points out that the cost of power generated at Kudankulam, Tamil Nadu by Russian reactors comes to $2.9 million per megawatt. But for the US built reactors, the cost would be at least $7.5 million, close to three times the cost incurred at Kudankalam!

The terms of the proposed Indo-US deal would be finalised in June 2017. Initially, Gujarat was proposed as a location, but following a strongly negative reaction from certain quarters, Srikakulam in Andhra Pradesh (AP) was chosen as the new site. In view of its long history of Left radicalism, observers wonder whether Srikakulam would prove to be a more comfortable location for the US. The AP government may have its work cut out to persuade the local peasants and agriculturists to part with their land for the project. And a too generous rehab package again, would only add to the costs.

However, it is common knowledge that Mr. Chandrababu Naidu is a past master at attracting major international investments. He would certainly go all out to showcase the new Andhra Pradesh as an attractive destination for industry. He has already succeeded in launching certain projects by holding prior discussions with farmers and offering them attractive terms.

Open source web information also notes that solar and wind power costs much less in India and production is already operational, with costs per unit ranging between Rs 4.34 and Rs 6.60, depending on location.

Interestingly, only in January this year, a Finnish company Fortum Finnsurya, had offered to generate power to be sold at the rate of Rs 4.34 per kwh in India There were other offers made to India which offered power at less than Rs 5 per kwh. Such end-customer friendly offers were not accepted at the highest level.

Given this backdrop, the US-built reactors could well turn into a bitterly divisive and sensitive political issue in India in the days ahead. And the fallout of the Indo-US agreement would be monitored closely by other countries as well.

It is common knowledge that China as well as Russia are somewhat wary of the increasingly closer ties between India and the US. But Delhi-based policymakers point out that India does not necessarily follow US dictates on every issue. However, Prime Minister Narendra Modi is desperate to bring in high technology to India from USA and that has led India to offer many concessions to the US in terms of foreign policy.

Indian officials have been taking speedy follow up action on the India-US joint statement issued in Washington on June 7 at the instance of the Prime Minister’s Office (PMO) since PM Narendra Modi has given top priority to the quick implementation of the programmes which have been mentioned in the joint statement. The PMO is monitoring the operations in consultations with the concerned ministries and the PM is being regular feedback on the developments so that the top level government leadership can intervene if there are any operational problems between the two governments.

The Nuclear Power Agreement is getting top priority. The Indian Government run Nuclear Power Corporation of India Ltd (NPCIL) is making preparatory work for filing fresh terms of reference by July this year with the Ministry of Environment and Forest to carry out environment impact assessment (EIA) and prepare the environment management plan for the proposed six 1,000 MW nuclear power plant at Kovvada in Andhra Pradesh in collaboration with the US firm Westinghouse. This has been needed as the NPCIL and the US company agreed on June 7 to begin engineering and site design work immediately for the six nuclear power plants in Kovvada, a new area in Andhra Pradesh where the site has been shifted from Gujarat scheduled earlier.

NPCIL sources say the company engineers in their earlier ToR mentioned that it will need 884 hectares of land for the Kovvada project and the cooling water requirement has been estimated at 69,000 million litre per day to be obtained from seawater. The total fresh water requirement including township has been estimated at 27.6 MLS. The fresh water needs will be met from Nagavati river till commissioning of desalination plant. NPCIL engineers have estimated that the project is expected to come up in 2022-23 but they are not sure about the cost competitiveness of power generated since there are apprehensions that the final cost will be quite high from this Kovvada project. (IPA Service)