Russia set to stall deal on two new n-reactors citing liability clause

PranabDhalSamanta Posted online: Monday, Oct 21, 2013 at 0000 hrs
Moscow : The hopes of firming up the commercial agreement for two more nuclear reactors from Russia during Prime Minister Manmohan Singh’s visit have suffered a setback with the Russian side wanting its legal team to take another look at the liability obligations in the agreed documents.

As a result, senior government sources said, an agreement was not on the cards for Monday, as no such step could be taken till lawyers on both sides give a green signal to the document.

But the government tried to downplay the issue, with sources projecting it as a “last-minute hurdle”. They claimed all issues had been settled, an “agreed text” reached, and were now going in for another round of vetting by the lawyers as the liability aspect was being dealt with for the first time in a commercial memorandum.

As a signal of growing cooperation between both countries in this field, the first reactor in Kudankulam is planned to be linked to the grid in the next 24 hours, just around the time Singh meets Russian President Vladimir Putin.

The initial objective was to couple this with the announcement of two more reactors at the same site, but despite a strong push, the provision on the right to recourse in India’s Civil Liability for Nuclear Damage Act remained the biggest concern.

The Indian side had suggested a way out by involving the General Insurance Corporation and getting it to work with the Department of Atomic Energy to come up with a rate chart of sorts along with a set time-frame for every supplier product.

The aim was to add predictability and monetise the risk so that suppliers could know how much to cater for as liability costs, an issue which the Russian side had also raised at some point. In the run-up to the visit, both sides had exchanged formulations on how to reflect this in the agreement, but clearly Moscow is still concerned about the implications.

Besides this, government sources said, the two countries will be agreeing to a programme of cooperation in the energy sector which would cover all key segments like production, exploration and transfer. The Indian assessment is that Russia is now keen to step up cooperation in this sector after the forecasts of falling demand in the West, especially the US, after the emergence of shale gas as a viable option.

Both Singh and Putin will also use this meeting to discuss their approach on global issues, given the growing “strategic congruence” between the two countries.

Sources pointed out that the positions of the two countries are quite similar almost on every key issue.

Syria was the latest example where India backed the line to respect Syrian sovereignty and adopt a political approach instead of exploring military solutions. Russia, sources pointed out, took this further and came up with a solution by way of Syria voluntarily agreeing to destroy chemical weapon stockpiles.

On Afghanistan too, sources said, the two countries agreed that neither of them want to send more boots on the ground but were willing to do all that was possible to help the country develop on its capabilities in the near future.