Agreement on Kudankulam unlikely during PM's Russia trip

Legal hitches appear to have cropped up in the plans to set up two new reactors in the Kudankulam Nuclear Power Project and a commercial agreement on it is unlikely to be signed at the Annual Summit between Prime Minister Manmohan Singh and Russian President Vladimir Putin in Moscow on Monday.

Government sources said all issues except one on the liability clause is yet to be resolved and lawyers on both sides are working on it.

"In any case it (agreement) won't be signed during the visit because it is a commercial agreement between NPCIL and Rosatom. They would like to do it separately," they said.

Russia, with whose collaboration the KNPP has been set up, is opposed to the project coming under the ambit of the Nuclear Civil Liability Law of India and wants it to be covered under the Inter-governmental agreement on the issue.

India has tried to assuage Russian concerns by making proposals on the liability limiting it to suppliers default in cases of equipment failure in the event of an accident.

Public sector General Insurance Corporation has been asked to work on details of the quantum of insurance and the premium including for the suppliers.

The sources said the deal on setting up Units 3 and 4 to be supplied by Russia is "close" to signing but for one aspect.

"It (deal) is very close. We have settled most of the issues except one. It is now with the lawyers. The lawyers of both sides have to clear it. So we are waiting for them to actually tell us," the sources said.

Asked whether the two governments have agreed on the deal on Units 3 and 4, the sources said: "It is very close. Everything else is cleaned up. It is just the lawyers legal vetting. It is the last stage. We have agreed on the terms and we have agreed on all that."

The sources said the two countries have agreed on all terms except on one.

Asked whether the liability clause of the nuclear liability law was the hitch, they said, "Yes, it is under discussion. It includes all that. That is why lawyers have to sign it."

"When it is done we will tell you. Till it is not done we can't tell you," they said.

Prime Minister Singh had told the Russian media ahead of his two-day visit to Moscow that "Indian and Russian companies have been holding negotiations on finalising arrangements for Kudankulam Units 3 and 4 and I am confident that these contracts would be finalised shortly."

On other aspects of bilateral ties with Russia, the sources said India was in the process of reaching agreements on expanding the programme including in hydrocarbons sector and the deals may be signed in this area.

To a question whether the relationship has undergone a change, the sources said India has adopted to changes after the break up of the Soviet Union and the ties have picked up.

"Russia is now a privileged partner with ties in defence, energy and other areas. We have a politically comprehensive relationship on the right trajectory," they said.

Image: Kudankulam Nuclear Power Plant in Tamil Nadu

Photograph: A Ganesh Nadar/Rediff.com