MOSCOW – link>link>Indialink> ‘s critical nuclear projects havebeen left in the lurch due to a severe funding shortage. The dearth offunds with the nuclear power corporation has put it in an embarrassingsituation, as it has not been able to repay loans availed from Russia forthe ongoing nuclear power plant projects.

link>link>Indialink> ‘s Department of Atomic Energy(DAE) is reportedly staring at a huge financial crisis that may force theorganization to default the repayment of a loan availed from Russia for thesecond consecutive year. The DEA fears that non-availability of funds willalso pull the brakes on the ongoing nuclear power projects. Furthermore,new projects that were to be started this year have been indefinitely putoff, 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 oflink>link>Indialink> Ltd (NPCIL) in 2017-18 on accountof a shortfall of earlier years in receipt of equity, as well as Russiancredit 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 million towardsRussian loan after meeting other expenses. Out of this, only $31 millionhas 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 million for2018-19. 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 link>link>Indialink> on the defaulters’ list of its oldally Russia, but the ongoing co-development of nuclear power projects inKudankulam in link>link>Indialink> ‘s south is also likely to receivea jolt as the credit arrangement between the Government of the RussianFederation and the Government of link>link>Indialink> required NPCIL to make repaymentat regular term in order to receive critical equipment from Russiansuppliers.

‘Important programs such as power generation of NPCIL are the backbone ofnuclear power program of link>link>Indialink> 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 ministry offinance 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 funds forthe cost of the first two projects at minuscule cost. Russia has alsostarted delivery of equipment to the third and fourth nuclear units ofKudankulam 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 tolink>link>Indialink> .

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 and aswell as R&D Units,’ the DAE acknowledged before the parliamentary standingcommittee of atomic energy.