Bush opens a French window

The world over, politicians and the media are saying—often in dismay– that India has got a fabulous deal from the US on the resumption of civil nuclear supplies. Many Americans and Europeans accuse President Bush of a sell-out to India, complaining that the new US law, waiving sanctions against India, will encourage other countries to go nuclear. Not at all, says the Bush Administration, India is unique and needs to be treated as such.

The media have barely covered the world reaction. They have focused instead on niggling objections of the BJP, Left Front and nuclear scientists. Some objections to remote corners of the agreement are so complex and boring that listening to them will send you to sleep.

Nobody takes the objections of the BJP seriously. Everybody knows that the BJP laid the foundation for this nuclear deal when in office, and now objects mainly because another party is reaping what it sowed. The Left Front regards the US as its main enemy, and so sees the US law as a trap, not the path to a strategic Indo-US relationship. US officials like Condoleeza Rice and Nicholas Burns have given declared that the law fulfils all assurances given to Parliament by Prime Minister Manmohan Singh. But the Left says this has not been done in entirety, and so the deal is a bad one.

Focusing on minute details of the agreement misses the wood for the trees. Whether India gets 100%,, 99% or 98% of what it wants is not the key issue. Surely even 98% of such a good deal is preferable to 0%. The big picture—which has made the world sit up and take notice—is that the US Administration and both its political parties have massively supported a waiver for India.

This has generated global momentum in India’s favour that looks unstoppable. It suggests that the 45-member Nuclear Suppliers Group (NSG) will now agree to resume supplies to India, overriding objections from traditional naysayers such as Australia and the Scandinavians. I expect the NSG to clear supplies to India within six months. And that is the big story.

Critics of the US law seem to think that India will buy nuclear equipment mainly or wholly from the US. Not so. India will buy mainly from France and Russia, partly because these are more reliably politically, and partly because they are the most cost-effective suppliers.

What Bush has opened is not a door just to America. He has opened a French window, a Russian window, and many other supplier windows. Even China, which has long opposed supplies to India, will probably make a U-turn and start bidding for Indian nuclear reactors. This is the most important outcome of the US law.

France has the best track record in building large nuclear power plants with scale economies. Almost 80% of its electricity supply is nuclear. It has long standardized production and erection of 1,500 MW sets, and is now building 1,600 MW sets in Finland and Normandy. Other countries have specialized mainly in1,000 MW reactors.

Nuclear power plants are economic only if two conditions are met. They must be built on time, without time and cost overruns. And they must operate at 80% of capacity or more. France’s track record suggests that it can best meet these requirements.

China has recently invited bids for four nuclear power plants of between 1,000 and 1,500 MW at Sanmen and Yangjiang. The final choice will be between France’s Areva, Russia’s Atomexport and Westinghouse (once American but now Japanese-owned). India can expect a similar pattern of bids.

As part of the nuclear deal, India has agreed to separate its civilian from defence facilities, and put 14 civilian facilities under international inspection. Indian scientists do not like this. But a hugely beneficial side-effect of the nuclear deal is that we can now move Indian scientists out of commercial nuclear plants. They have been guilty of a thousand delays and managerial blunders in building nuclear power plants. After decades of bungling, they can now build 200MW reactors on time, and boast that they can export these. What delusions of grandeur! Who will buy such tiny, obsolete reactors rather than new-generation reactors that are much safer and more economic?

Our scientists excel in scientific tasks that set no ceiling on time or expense, such as developing indigenous technology for weapons. But they are hopeless at managing commercial power plants. Their scientific training does not prepare them for this.

Now that India is no longer a nuclear pariah, our scientists should focus on strategic and defence tasks, leaving power generation to the private sector, which has the managerial skills. Since defence and civilian installations are being separated, we should amend our laws to permit private investment in nuclear power. Companies like Tata, L&T and Reliance are eager to build nuclear plants, using French and Russian equipment. That will be the best way to ensure a future nuclear power programme free of the delays and glitches of the past.

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