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Nuclear test for Modi in US pact

- CM faces delicate choice amid land protests against reactors

New Delhi. Aug. 6: A key pact India’s nuclear operator and American firm Westinghouse are likely to ink when Prime Minister Manmohan Singh visits Washington this September could pitchfork Narendra Modi into a delicate debate on nuclear commerce for the first time.

The agreement will commercially commit them to setting up six nuclear reactors in two Gujarat villages near Bhavnagar, laying the ground for land acquisition for a project local residents are protesting against, top officials here confirmed to The Telegraph.

The Nuclear Power Corporation of India Limited (NPCIL) and Westinghouse are close to sealing the pact that edges the two nations closer to realising the landmark Indo-US nuclear deal Singh staked his government on in 2008, the officials said.

But Singh’s gain in September could also thrust an uncomfortable choice on Gujarat chief minister Modi between protesting farmers and industry, ahead of elections that his supporters hope will propel him towards the Prime Minister’s chair.

“Once the pact is signed, the NPCIL, through the state government, can prepare for the process of land acquisition,” a diplomat, aware of the agreement India’s sole nuclear operator is signing with Westinghouse, said. “There has not be any takeover yet, but the bureaucracy can begin its work.”

Backing the project despite local opposition could dent Modi’s projection as an alternative to the UPA government, accused by the BJP of having ignored the interests of ordinary Indians. But supporting the protesting farmers could jeopardise the goodwill Modi enjoys in industry — domestic and abroad — and turn his few supporters in the US against him.

Politically, Modi has so far remained silent on the debate over proposed nuclear reactors raging across the nation over the past few years, from Jaitapur in Maharashtra to Haripur in Bengal and Kudankulam in Tamil Nadu.

Administratively, his government has been keen on nuclear power, and promptly agreed once the villages of Mithi Virdi and Jaspara were picked as sites for the Gujarat Nuclear Power Park in the shadow of the 2008 Indo-US nuclear deal authored by Singh and then US President George W. Bush.

Even as protests have grown over the past few months, the Modi government has remained at least administratively supportive.

The Gujarat government facilitated NPCIL officials in drilling the region to test the rock bed and assisted in the Environment Impact Assessment of the project that critics say ignored concerns raised by the villagers and activists. The villagers left midway through an environment assessment hearing called by the local administration in Bhavnagar after they felt they weren’t being heard.

But the local protests have till now been clouded by larger disagreements between India and the US over the 6,600MW project.

Westinghouse and General Electric — the American nuclear firms that the two governments agreed would supply the first set of nuclear reactors under the 2008 agreement — remain unconvinced about India’s nuclear liability law.

The law, passed by Parliament in 2010, allows the NPCIL to seek partial compensation from suppliers if their reactors are involved in a nuclear accident. The US wants India to tweak the law. India has refused.

The inability of the two nations to break this deadlock has triggered criticism of the Indo-US nuclear deal among some of its most vocal supporters, who argue that American firms aren’t getting the business they had hoped for.

This tension was a key element of the agenda when US secretary of state John Kerry visited India in June and when Vice-President Joe Biden came in July. After his meeting with external affairs minister Salman Khurshid, Kerry announced that the two countries had agreed to conclude the “commercial agreement” between the NPCIL and Westinghouse by September — when Singh visits the US for a bilateral meet with President Barack Obama and for the UN General Assembly.

Although the pact that the Indian operator and the American supplier are likely to sign will not be the final commercial agreement detailing Westinghouse’s total investment, New Delhi and Washington hope it will help soothe a frustrated US nuclear industry.

“This is not the commercial agreement,” a senior diplomat here said, stressing on the last three words. “But it’s significant, and it’s a milestone, make no mistake.”

It will help India and the US — described by Obama as “natural allies” — challenge suggestions that their strategic relationship has lost the zing it had during the Bush years.

On the ground, it will outline a series of steps that Westinghouse and NPCIL will take next to move towards a final commercial agreement. Those steps will include negotiations on the liability law that Russia has also raised concerns over. Both firms are expected to make small financial and administrative commitments, officials said.

And once the pact is signed, Modi may need to explicitly commit too.