Jayanth Jacob, Hindustan Times New Delhi, April 08, 2013

A nearly three-year-long tussle between India and Russia over the modalities of the remaining two nuclear reactors – to be set up at Kudankulam – may finally be close to a resolution. India is willing to pay more if Russia accepts India’s nuclear liability law, a government source told HT.

A technical team is now in Mumbai to tie the loose ends so that the pact for reactors 3 and 4 can be signed at the earliest. India and Russia had signed a protocol for funding two new units at Kudankulam last year. The protocol provides that Russia will extend an export credit of $3.4 billion to Russian organisations to help build the units at four per cent interest and the total cost is expected to be more than $11 billion now.

The Kudankulam reactor 1 is to be operationalsied this month and reactor 2 will be functional within this year. “The additional cost being incurred for adhering to Indian liability law can be loaded into the reactor price and that is our position as we are looking to seal the deal for reactors 3 and 4”, said a source.

Negotiations regarding the two reactors in Kudankulam had been stuck over Russia’s refusal to accept the provisions of India’s nuclear liability law that came into force in 2010. Russia says these two reactors are part of the 2008 agreement for four additional reactors, which stems from the comprehensive Inter-governmental agreement (IGA) signed between India and the former USSR in 1988 for cooperation in areas of peaceful uses of atomic energy. The IGA signed in 2008, makes only the Indian operator liable for any nuclear accidents.

Russia wanted the same terms of pact to be continued for the 3rd and 4th as well – a position that Indian government could not accept in the light of the new liability law. The Kudankulam site, also plagued by anti-nuclear protest, is also critical to the India’s nuclear sector targets. The government has to show that it moves ahead with the nuclear energy target of 63,000 MW of power from nuclear power by 2032.