Citizens' Issues
Power from Kudankulam – relief to Southern Sisters!

The strike in Neyveli Lignite plant is still going on causing havoc in the power production and distribution in Tamil Nadu. Fortunately, the Kudankulam Nuclear Power Plant has gone critical and is likely to generate power and supply to the Southern grid, but starting with supplies to Tamil Nadu

It has taken quarter of a century to fulfil the dream of former Prime Minister Rajiv Gandhi when he signed an agreement with President Mikhail Gorbachev of USSR to set up a nuclear power plant at Kudankulam in Tamil Nadu, where Soviet Union was to supply the necessary reactor and the fuel to run the plant.


With the collapse of the Soviet Union, the Project got derailed. Around this time, India had also stood its ground in refusing to sign the Nuclear Non-Proliferation Treaty (NPT).  Pressure from the US and sanctions on India after the Pokhran tests only delayed this project further.


However, inspite of the USSR collapse, Russia stood by India and finally in 2001 it signed a memorandum of understanding (MoU) to set up the 2000 MW Kudankulam Nuclear Project.  A few months later, the work began.


And it has taken a little more than a decade to complete the project when agitation started as a sequel to the Fukushima disaster in Japan, with the public being supported by various parties.


Over the next two months, the first of two units of 1000 MW each will start pumping electricity into the Southern Grid.  As the home state for the nuclear plant, Tamil Nadu will get 460 MW of power, though there is demand that the entire power generated be given to that state. When the nuclear power plant gets fully operational, three other southern sisters will get the balance power.  For the time being, it is conservatively estimated that Kudankulam will be able to attain a 90% capacity, and eventually, Tamil Nadu's share will be 960 MW of power.


Once the power flows into the system, it is expected that this agitation will also die down.


All the southern states have experienced power shortages on a regular basis, with several hours of load-shedding being the norm of the day.  Power companies have had to incur substantial loss when they buy power from the open market. As the tariff for the consumer is fixed, they do not have much choice in the past.  However, with the commencement of power supply from Kudankulam, it is expected that the power tariff will come down to around Rs3 per kWhr as against more than Rs5 at present.


The Kudankulam plant went critical last week, and the power flow is expected by the end of this month. Commercial production is expected to start in about 45 days as this much time is required to ensure that all the equipments are functioning in the designed and expected manner.


Press reports indicate that work on Unit-I has been satisfactory so far based on the various tests carried out.  In the meantime, work on Unit-II is also on schedule where dummy fuel loading is going on at the moment.  If the work continues smoothly, like the first Unit, it is expected that the 2nd Unit will also be commissioned over the next six-eight months.


It is expected that official inauguration of the Kudankulam project may be in the middle of August to coincide with the Independence Day, though no details have been officially announced.


It may be borne in mind that the Southern Grid is not linked to the National Power grid so far, but which has been planned for the next year. Kudankulam will cover the void until this happens.


(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)



Arjun Rajpati

3 years ago

completly a waste of our money. This plant is not safe. Uses substandard materials and technology by our inept engineers. Radiation in case of an accident could destroy the enitre south and make it completly inhospitable to live on


3 years ago

Our country is in a hurry to build more and more nuclear power plants, having least concern for the safety of the environment and humans. No doubt our country is in a need of energy but human security is also at risk by developing plants without the consideration of safety measures. Spending so much on plants, a little should also be given to upsurge the hunger of our people.


3 years ago

If Plant has been operated then government should adopt the policy to fully securee the surrounding areas and people in that area as many cases has been happened in the past due to improper safety and security measures while operating the plant. And one more thing If our govt get a chance to take up the issues of floods, health issues, malnourishment then it would be a kind initiative on our govt part.

sharmila kunand

3 years ago

What about the people living nearby areas. Already seismological surveys have alarmed the government regarding the sensitiveness of the region. If still it runs then we should prepare ourselves to Fukushima like accident.


3 years ago

Complete agree with this: First they do not want the plant to happen. Post it starting the they want more of the production. What type of people are we. We are facing bad time of poverty in our country and now the flood why govt dnt think on these lines


3 years ago

The article by A.K. Ramdas is well written and accurate to the extent I know. Incidentally, I wish to share that actually, I was also reading an interesting article related to nuclear power (, which also mentions that in various countries the cost of nuclear power is being reduced by research and innovative designs. The safety standards are relatively very very high in nuclear field, it is realized and pointed out. Nuclear energy is one of the viable options in India's energy-mix, with or without collaborations. India's Human Development Index will increase with increased production and non-wasteful use of energy.

As a citizen, I only wish that we apply similar safety standards in other areas to avoid unsafe (read pot holes) situations in our roads, improved health care, in adulteration of food products, in traffic safety and in ensuring safety during monsoons (read connecting all rivers in India).
Prof. S. Ganesan


3 years ago

First they do not want the plant to happen. Post it starting the they want more of the production. What type of people are we?

R Balakrishnan

3 years ago

Wonder if that Udaya Kumar and his Church financiers can be put behind bars for life for delaying this project by raising frivolous objections.



In Reply to R Balakrishnan 3 years ago

No nothing like that is going to happen. Even Jaya supports muslims and Christians and the hindus left with no supporters in India

UPA govt’s FDI liberalisation move: Too little, too late
While the UPA government is trying to put up a brave show on the FDI front, the bottom-line of India Inc shows a pathetic picture. The current economic situation is so bad that there is not even an elbow room for the RBI to cut interest rates and for the government to embark on large-scale policy stimulus
Worried over the falling rupee, capital outflows and the sagging morale of foreign institutional investors (FIIs), the Manmohan Singh-led United Progressive Alliance (UPA) government has announced liberalization of foreign direct investment (FDI) caps in 13 sectors. In addition to hiking FDI limits in some sectors, the government has changed the FDI route to the automatic route. This means only a notification to the Reserve Bank of India (RBI) is required for the FDI as against the earlier route of requiring approval from the Foreign Investment Promotion Board (FIPB). For eight of the 13 sectors, the government has changed the FDI route to automatic, and for four sectors, it has liberalised the cap.
The latest announcement on increasing FDI in insurance is nothing but a reiteration of an earlier move. Last year the Cabinet approved hiking FDI limit in insurance to 49% but the proposal is still awaiting Parliament’s nod.
According to Morgan Stanley, liberalization of FDI caps is another small measure by the government to support the investment sentiment for investors. “With high current account deficit-CAD (4.8% of GDP in FY2013) and real short-term interest rates (on CPI) close to zero, the currency has been under severe pressure since the US Fed relayed its decision to taper quantitative easing in the second half of the calendar year," it said.
Nomura Research, on the other hand feels that these measures, apart from boosting near-term sentiment, are medium-term positive as they will help attract stable long-term capital inflows. “However, we doubt there will be any significant impact on flows this year,” Nomura said.
In the last two fiscals, contrary to the economic theory, despite rupee depreciation, India's exports have suffered because of the lack of global demand and a virtual halt of iron ore exports. Simultaneously, the import of coal, crude oil and gold has increased. While some of these shocks are exogenous to India, domestic issues have also aggravated the currency depreciation.
While the UPA government is trying to put up a brave show on the FDI front, the bottomline of India Inc shows a pathetic picture. India Ratings & Research (Ind-Ra) said it believes the current business environment is more challenging and stressful than the conditions in 2001-2003 and second half of FY2009. The current economic situation provides limited elbow room to the RBI to cut interest rates and for the UPA government to embark on large-scale policy stimulus. 
According to Ind-Ra credit metrics of BSE 500 corporates, excluding banking and financial services, have deteriorated to their lowest since FY2008. This is attributed to a steady rise is debt levels without a commensurate increase in cash margins. “Given the mounting economic stress, the credit metrics of such corporates are unlikely to show a significant improvement in FY14. With external liquidity likely to remain tight, corporates have to depend upon the strength of their own balance sheet as well as on their ability to generate free cash flows and maintain a liquidity cushion,” the ratings agency said.
Here are the measures announced by the Manmohan Singh government and its likely impact...
1. Allowing 100% foreign direct investment (FDI) in telecom from 75% currently
- The telecom sector is in doldrums. Several new entrants left the race due to dwindling finances and legal hurdles. Almost all brokerages are cautious on telecom given weakening growth outlook, regulatory uncertainty, sharp depreciation of rupee and entry of a new, powerful entrant—Reliance Industries (RIL). In this scenario, it would be difficult for new foreign investors in pour money in the telecom sector. It may help incumbents like Vodafone to get additional capital, though. The FDI inflow in the telecom sector would depend more on the regulatory environment than the change in the FDI route.
2. Increasing the cap on FDI in the defence sector to 49%, with approval from the Cabinet Committee on Security from 26% (via FIPB)
- When domestic manufacturers are finding it difficult to get clearances from the defence ministry, FIIs stand a miniscule chance to pass the litmus test of Cabinet Committee on Security 
3. FDI cap for power exchange was retained at 49% but brought under the automatic route
- This would help reduce the time for approval.
4. FDI (up to 49%) in petro refineries, stock exchanges and insurance to be through the automatic route
- This would help reduce the time for approval. Insurance will have to wait.
5. FDI cap for asset reconstruction companies raised to 100%, and through FIPB route beyond 49%
- This would help reduce the time for approval.
6. FDI in tea sector beyond 49% through FIPB route while the clause about divesting 26% to an Indian company in the first five years has been deleted
- A fragmented sector. No major inflows expected. Perhaps designed to help specific businessmen.
7. FDI in single brand up to 49% through the automatic route, beyond that through FIPB
- Retail sector is also laden with uncertain regulatory environment. However, the increase in FDI in single brand should see some new players entering the ever-lucrative Indian market 
8. FDI for credit information companies hiked to 74% from 49%, and in courier services 100% FDI limit will be allowed under the automatic route
- This can attract only small amounts of money  



nagesh kini

3 years ago

Extremely well put across very rightly -
too little, too late in time.
it tantamounts to locking the stable after the horse has bolted.
While FDI is one matter, FIBP and other procedures are time consuming - Bloomberg's list of the top 20 new investment destinations are now Nambia and Zambia! Not India!
It is well known that the so-called FII money is nothing but Indian black money stashed abroad legitimized via circuitous devious routes.

HDFC Bank Q1 net up 30% at Rs1,844 crore
As of 30 June 2013, HDFC Bank's portfolio quality remained healthy, with gross non-performing assets (NPAs) at 1% of gross advances and net non-performing assets at 0.3% of net advances
Private sector lender HDFC Bank on Wednesday reported 30% growth in net profit at Rs1,843.86 crore for the quarter ended June 2013.
The bank had earned net profit of Rs1,417.39 crore in the April-June quarter of the 2012-13, HDFC Bank informed the exchanges.
The total income of the bank rose to Rs11,588.56 crore in the April-June quarter, from Rs9,536.9 crore in the same period last year.
The net interest margin for the bank was 4.6% as compared to 4.3% in the same period of the previous year.
As of 30 June 2013, HDFC Bank's portfolio quality remained healthy, with gross non-performing assets (NPAs) at 1% of gross advances and net non-performing assets at 0.3% of net advances.
The bank's Capital Adequacy Ratio (CAR) as of 30th June stood at 15.5%.
Shares of HDFC Bank closed at Rs 662.25 apiece on the BSE, down 2.36% from their previous close.


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