KOODANKULAM NUCLEAR POWER PLANT

In 1988, Soviet General Secretary Mikhail Gorbachev and Indian Prime Minister Rajiv Gandhi signed an intergovernmental agreement for India to purchase two 1000MW light-water power reactors from the Soviet Union.  Under this agreement, the reactors would be constructed by Atomenergoeksport at a planned power plant near Koodankulam, fueled with LEU fuel supplied by the Soviet Union for the operational life of the reactors, and financed by a multi-billion-dollar Soviet credit.[1] When the Soviet Union dissolved in December 1991, a final contract for the reactors had not yet been signed, and by October 1992 the chairman of the Indian Atomic Energy Commission said that the reactor deal had "completely collapsed" because the Russian Federation could not provide capital for the project.[2] The deal was never formally cancelled, however, and in 1993 negotations over the Koodankulam reactors resumed. Disagreements over financing and credit continued to be a sticking point until 21 June 1998, when Russian Minister of Atomic Energy Yevgeniy Adamov and Indian Atomic Energy Commission chairman R. Chidambaram signed a final agreement. Under this agreement, Russia will build two 1000MWe VVER light-water reactors at the Koodankulam plant at a cost of $2.6 billion, financed by credits from Russia. The agreement did not contain provisions for the supply of fresh fuel or the reprocessing and disposition of spent fuel.[3,4] As the agreement came barely six weeks after India's series of nuclear weapons tests, the Koodankulam deal was viewed by many as a significant poltical challenge to the international nonproliferation regime.

The United States repeatedly raised legal objections to the agreement while it was still under negotiation. The guidelines issued in 1992 by the Nuclear Suppliers Group (NSG), of which Russia is a member, specify that non-nuclear weapons states must agree to full-scope IAEA safeguards on all source and fissionable material in order to receive nuclear materials. However, the guidelines also state that the requirement for comprehensive safeguards does not apply to agreements drawn up before April 1992.[5] Russia contends that the Koodankulam deal was originally signed in 1988 and is therefore not subject to the 1992 requirement for full-scope safeguards, and both Russia and India state that the plant will be placed under facility-specific safeguards.[6]

The agreement also raises concerns over spent fuel, as the dispostition of spent fuel rods from the light-water reactors remains unclear. While some reports indicate that spent fuel from the VVER-1000s will be returned to Russia, others say that it could remain in India.[7,8,9]  Former Russian Minister of Atomic Energy Viktor Mikhailov has stated if the spent fuel rods remain in India, facility-specific safeguards would prevent the diversion of the plutonium they contain into India's nuclear weapons program.[6,9] The spent fuel could also be returned to Russia for reprocessing, and the plutonium they contain retained in Russia for disposition, but this might require amendments to Russia's environmental laws.[10]

Regardless of the resolution of legal issues about the agreement, and of the uncertainties over the plant's spent fuel, the sale of nuclear reactors to a state which has consistently refused to sign the NPT raises serious questions over Russia's commitment to nonproliferation. In the words of Indian defense analyst K. Subramanyan, "The implication of this is that one of the five nuclear-weapon powers, which is the member of NPT, is now willing to deal with India on nuclear power.  And, therefore, this will pave the way for other countries which have got nuclear power to sell to India."[11]
Sources:
[1] "Indo-Soviet Agreement Signed," Nuclear Engineering International, January 1989, p. 2.
[2] Gamini Seneviratne, "Lack of Capital Deters Russian from Building VVERs in India," Nucleonics Week, 1 October 1992, pp. 10, 11.
[3] Nirmala George, "Moscow Ends Atomic Power Blockade to India," Indian Express, 21 June 1998, http://www.expressindia.com.
[4] Pranay Sharma, The Telegraph (Calcutta), 24 December 1997, p. 4; in "Russia to Extend Loan for Sale of Nuclear Reactors," FBIS Document 19971225000418, 25 December 1997.
[5] International Atomic Energy Agency, "Communication of 29 April 1996 Received from the Permanent Mission of the Russian Federation to the International Atomic Energy Agency Regarding Guidelines for the Export of Nuclear Material, Equipment, and Technology," INFCIRC/254/Rev. 2/Part 1/Add. 1, 7 June 1996,  http://www.iaea.org/worldatom/infcircs/inf254r2p1a1.html.The full text of this INFCIRC is also available in the Profiles Fulltext section.
[6] R. Adam Moody, "The Indian-Russian Light Water Reactor Deal," The Nonproliferation Review, Fall 1997, pp. 112-122, http://cns.miis.edu/pubs/npr/moody51.html.Also available in PDF format in the NIS Profiles Fulltext section.
[7] K.K. Katyal, "PM's Russian Tour to Boost Ties," The Hindu, 20 March 1996,  http://www.webpage.com/hindu.
[8] R. Parthasarathy, "Koodankulam: Experts Express Concern," The Hindu, 7 April 1997,  http://www.webpage.com/hindu.
[9] Dadan Upadhyay & PTI, Russia Agrees to Sell N-Reactors to India," Indian Express, 26 March 1997,  http://www.expressindia.com/ie/daily.
[10] Izvestiya, 14 December 1995; in "Arrival of Finnish Nuclear Waste Protested," FBIS-SOV-96-001-S.
[11] Doordarshan Television Network (Delhi), 21 June 1998; in "Accord With Russia on Nuclear Reactors Termed Significant," FBIS Document 19980621000712, 21 June 1998.

Page last updated 13 January 1999
For more recent developments, see the Nuclear Exports to India Developments file.

This material is produced independently for NTI by the Center for Nonproliferation Studies at the Monterey Institute of International Studies and does not necessarily reflect the opinions of and has not been independently verified by NTI or its directors, officers, employees, agents. Copyright © 2002 by MIIS.

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