MOSCOW – India’s critical nuclear projects have been left in the lurch dueto a severe funding shortage. The dearth of funds with the nuclear powercorporation has put it in an embarrassing situation, as it has not beenable to repay loans availed from Russia for the ongoing nuclear power plantprojects.

India’s Department of Atomic Energy (DAE) is reportedly staring at a hugefinancial crisis that may force the organization to default the repaymentof a loan availed from Russia for the second consecutive year. The DEAfears that non-availability of funds will also pull the brakes on theongoing nuclear power projects. Furthermore, new projects that were to bestarted this year have been indefinitely put off, Sputnik has reported. –

The DAE had asked the finance ministry for $672 million (INR 4,305 crore)as budgetary support to the Nuclear Power Corporation of India Ltd (NPCIL)in 2017-18 on account of a shortfall of earlier years in receipt of equity,as well as Russian credit of $610 million (INR 3903 crore).

But, according to the DAE, the finance ministry granted only $224 millionfor the year to NPCIL, which left the department with $117 milliontowards Russian loan after meeting other expenses. Out of this, only $31million has been paid towards loan till December 2017.

“As against the demand of equity and loan of $610 million, only $224million was given in Budget Expenditure 2018-19 against cumulative demandincluding previous years shortfall, totalling $672 million, out of which$224 million has been provided in Revised Expenditure 2017-18, leavingbalance of $448 million in BE 2018-19,” the DAE explained before theparliamentary standing committee on atomic energy.

Despite a fund gap towards investment and a loan of $448 million from theprevious year, the finance ministry has only given $260 millionfor 2018-19. This gap would once again leave the NPCIL in an embarrassingsituation, as it will hardly able to repay the Russian loan for the secondconsecutive year.

This will not only put India on the defaulters’ list of its old allyRussia, but the ongoing co-development of nuclear power projectsin Kudankulam in India’s south is also likely to receive a jolt as thecredit arrangement between the Government of the Russian Federation and theGovernment of India required NPCIL to make repayment at regular termin order to receive critical equipment from Russian suppliers.

“Important programs such as power generation of NPCIL are the backboneof nuclear power program of India and hence, critical component suchas provision towards repayment of Russian credit must not be made to sufferfor want of funds,” the parliamentary panel said, asking the ministryof finance to make available the required funds to NPCIL and DAE.

Russia has been the major force behind the construction of nuclear powerprojects in Kudankulam, including providing three quarters of the fundsfor the cost of the first two projects at minuscule cost. Russia has alsostarted delivery of equipment to the third and fourth nuclear unitsof Kudankulam earlier this month. The third and fourth units of the KKNPPproject will cost approximately $6.1 billion.

The fifth and sixth units of KKNPP project cost approximately $7.7 billion;which will be commissioned by 2023. The joint project is funded in 70:30debt-equity ratios. The Russian government is lending $4.2 billion to India.

The massive shortage of funds has also impacted critical research anddevelopment in the atomic energy sector. The problem has also stalled theprogress in setting up a critical cancer research hospital in the northerntown of Varanasi — from which Prime Minister Narendra Modi was elected as aparliamentarian.

“Due to non-availability of funds, there is no scope to take up any newproject in this year. Under aided institutions, ongoing projects of TataMemorial Centre at Varanasi, Punjab, Andhra Pradesh and Guwahati could notbe taken up as no additional funds were provided in revised estimate2017-18.

However, no additional funds have been allocated under aided institutionsin BE 2018-19. Under Establishment expenditure, no additionality has beenprovided to the department over and above the revised estimate 2017-18allocation, which may adversely affect the production facilities andas well as R&D Units,” the DAE acknowledged before the parliamentarystanding committee of atomic energy.