Citizens' Issues
Prime minister ignores former bureaucrat’s plea on Jaitapur nuclear power project

Former power secretary has written repeatedly to the prime minister requesting that the nuclear power plant project be scrapped. He has also warned of a ‘coal scam’ building from the numerous thermal projects sanctioned recently

Two days ago, on the 25th anniversary of the Chernobyl nuclear disaster, the Indian environment and forests minister gave the green signal for the nuclear power plant project at Jaitapur in western Maharashtra. The announcement has been received with the uproar that it deserves. But it's evident that the government is, once again, choosing to ignore the voices of protest.

Among those who have criticised the proposal is EAS Sarma, former power and finance secretary and energy adviser to the National Planning Commission. Mr Sarma has written to prime minister Dr Manmohan Singh urging him to scrap the project and to veto any proposed addition to the existing nuclear power generation capacity. Besides, the government had already given the nod for a massive thermal power project in the same region.
Mr Sarma writes: "I earnestly appeal to you, Mr Prime Minister, to announce the suspension of the Jaitapur project forthwith, and to put on hold similar other projects in the pipeline. Jairam Ramesh's ministry has already cleared more than 1,50,000MW of coal-based capacity. Like the 2G scam, as I had already forewarned you, a major 'coal scam' is unfolding."

Mr Sarma has previously written six letters to the prime minister on the issue, but his pleas appear to have been ignored.

The letter, dated 27th April 2011, also refers to the Fukushima catastrophe. "The liabilities on account of the (Fukushima) disaster run into billions of dollars, many times more than the cost of the plant itself. MNCs responsible for the disaster are queuing up already to share the profits of the clean-up operation. Do you want this to be repeated at Jaitapur?"

These issues have been raised repeatedly, but instead of instead of answering the questions, the government has stuck to mechanical utterances on international standards and safety measures. Mr Sarma is not convinced about the government's seriousness on the matter. "The fact that the MNCs have successfully prevailed upon the government to enact a law to cap the liability of a nuclear accident, and France is hoping to bring down the cap further, demonstrates the low level of confidence that Areva itself reposes in its own reactor design," he says.

He charged that the government was committed to furthering the agreement with the French company Areva, rather than respecting the people's wishes. Areva will build two 1,650MW European pressurised reactors (EPRs) for the 9,600MW nuclear plant at Jaitapur. The $9.3 billion deal was signed during the recent visit of the French president to India. Areva has set up two similar EPRs in Finland, which cost an astounding Rs24 crore per MW.

The government, instead of going for a competitive bidding process, decided to procure the reactors directly. Mr Sarma asks, "Does the PMO expect the people to believe that the Department of Atomic Energy (DAE) and the Nuclear Power Council of India (NPCIL) tried to keep consumers' interests in view and lived up to this assurance regarding transparency and economy?" The Atomic Energy Act itself is shrouded in secrecy.

Mr Sarma also questioned the decision to undertake a comprehensive environment impact assessment report after the plant becomes operational. "Konkan, a region of uniquely rich biodiversity, has been singled out to bear the dangers and the pollution burden of 9,600MW of nuclear power, 15,650MW of coal/gas-based power and three disruptive bauxite mines that will destroy the region's identity. The PMO's assurance of an assessment to be made after the havoc is wrought is like adding salt to injury," he writes.

He is also sceptical about the 'autonomous' Nuclear Authority of India, because he believes it will take the same route that other institutions have taken.

"Negawatts (saved megawatts), instead of new megawatts, are the need of the hour. Planning pundits need to learn from the people of this country who seem to know better about what they want," Mr Sarma says.



Jyrki from Finland

5 years ago

"Areva has set up two similar EPRs in Finland, which cost an astounding Rs24 crore per MW. "

Only one EPR, but it cost about 7 billion euros. Original price was 3 billion €.

K B Patil

5 years ago

The PM is a nuclear hawk and has a closed mind on the matter. He will rest in peace only when the whole of India is blown to bits. Chernobyl and Fukushima have shown us that, whatever the safeguards, nature has a way of teaching us lessons we refuse to learn. Man's greed has overtaken his intelligence and that is the reason we are racing to extinction.

dr YKrishna murty

5 years ago

PM put deaf ear because under d influence of USA..MAN WHO WOES2 destroy D INDIA.

Monetary tightening to pull down India’s GDP to 8.2%: IMF

“In India, base effects and policy tightening are projected to slow growth from 10.4% in 2010 to a more sustainable 8.2% in 2011 and 7.8% in 2012,” the IMF said in its Asia and Pacific ‘Regional Economic Outlook’ report

“In India, base effects and policy tightening are projected to slow growth from 10.4% in 2010 to a more sustainable 8.2% in 2011 and 7.8% in 2012,” the IMF said in its Asia and Pacific ‘Regional Economic Outlook’ report

Washington: India’s economic growth rate will moderate to 8.2% in 2011 from 10.4% in the previous year, and fall further in the next year, mainly because of tight monetary policy measures, reports PTI quoting the International Monetary Fund (IMF).

It cautioned that the strong growth across Asia could lead to overheating, a phenomena when the production capacity of an economy fails to keep pace with aggregate demand.

“The IMF warns that Asia’s rapid recovery from the global economic crisis has been accompanied by pockets of overheating across the region,” it said in its Asia and Pacific ‘Regional Economic Outlook’ report.

“In India, base effects and policy tightening are projected to slow growth from 10.4% in 2010 to a more sustainable 8.2% in 2011 and 7.8% in 2012,” the IMF said.

The IMF report comes close on the heels of Asian Development Bank (ADB) projecting India’s growth at 8.2% for the financial year 2011-12.

The Reserve Bank of India (RBI) has already hiked policy rates eight times since March 2010 to tame inflation. During the annual credit policy to be announced on 3rd May, the RBI is expected to further raise short-term lending (repo) rate by 25 basis points.

The IMF report also said that during 2010, India with a growth rate of 10.4% overtook China which grew by 10.3% during the year.

Pointing out that India and China will play leading role in Asia’s growth, the report said the region’s economy as a whole would see growth rate moderating to 6.8% in 2011 from 8.3% in the previous year. Asia’s growth during 2012 has been projected at 6.9%.

“While we expect inflation in many Asian economies to increase further in 2011 before decelerating modestly in 2012, inflation risks in Asia remain tilted on the upside,” it said.

India’s headline inflation stood at around 9% in end-March, which is higher than the RBI’s projection of 8%, and much above the comfort level of 5%-6%.

The IMF said that the earthquake in Japan last month caused huge loss of life and property and the government’s response helped to contain the economic impact.

“...Spillovers to the rest of Asia through the supply chain should be limited,” it said.

It said that the credit growth was not far from the “boom” levels in a number of economies, while property prices continued to grow rapidly in a few regional markets.

“(There could be) additional risks from higher commodity prices, volatile capital inflows and possible spillovers from Japan’s earthquake," IMF head (Asia and Pacific department) Anoop Singh said.


After the Reliance and Kotak gold savings funds, Quantum has launched an identical product

Gold is making new highs, so fund houses are queuing up to launch gold saving schemes which will enable retail investors to park their money in gold ETFs. But such schemes carry hidden costs—and if you are risk-averse, you should not be betting on gold remaining at such exorbitant levels

Quantum Gold Fund has also launched its gold savings fund after the launch of the Reliance and Kotak gold savings funds, which were the first gold fund-of-funds (FoF) in the industry. (See: Reliance Gold Savings Fund has a strange target group).
Similar to the Reliance and Kotak funds, this is another FoF scheme and investors must understand this offer very clearly. It's a gold ETF (exchange traded fund) based FoF scheme which will invest only in Quantum gold ETFs. The New Fund Offer (NFO) opens on 28 April 2011 and closes on 12 May 2011.

What Reliance had essentially done is converted an ETF into a mutual fund product. This means Reliance can also offer it as a Systematic Investment Plan (SIP) and the same had been done by Kotak and now Quantum has followed suit. Reliance Gold Savings Fund had been pitched as a good option for small investors who want to invest in gold. It has opened the doors for non-demat account holders as it provides the facility to invest through the online medium and through the physical application mode.

Those who were not able to invest in gold ETFs since they did not have a demat account can now participate by investing in this fund. The same procedure was followed by Kotak and now Quantum has also joined the rally.

However, the issue is whether the product is truly beneficial for those whom it is meant for. The gold fund is aimed at those who do not even have a demat account.

We had mentioned this when the Reliance gold savings fund was launched: "Clearly, those who do not even have a demat account don't even know about the risks of equity or are risk-averse enough not to dabble in equity shares. Most investors like them have preferred a safe investment, such as fixed deposits."

At a time when gold is making new highs, asset managers and brokers are queuing up to launch gold saving schemes which will enable retail investors (even those without demat accounts and through SIPs) to park their money in gold ETFs. First, Reliance and then Kotak tried to reach a common class of people who did not have demat accounts and were interested in investing in gold. It targeted the middle class which represents a majority of the population. Obviously, other fund houses do not want to fall behind. So Quantum MF has joined the rally… and there will be many more to come.

As pointed out by Moneylife in February, "The price of gold has gone up six times in the last 10 years. Any asset that has gone up so much for so long a time carries a huge risk of a crash. How will a risk-averse investor react to an asset that can crash suddenly?"

A second issue with the fund is its cost structure. The entry load is nil and exit load is 2% if the investor exits within one year; nil after one year. However, since this is an FoF scheme, there might be ETF expense charges that one needs to pay. As per SEBI (the Securities and Exchange Board of India) guidelines, an FoF can either charge 0.75% of total expenses or it can charge a maximum of 2.5% of total expenses-including the weighted average total expenses of its underlying schemes-and not more than 0.75% as management fee from investors. Though the Quantum Gold Savings Fund will charge 0.75% annually, it will cap the overall cost (FoF+ETF charges) at 1.25%. Even then, a 1.25% cost is not insignificant.




5 years ago

Quantum's scheme is superior to both Reliance and Kotak since the total expenses is capped at 1.25% against 1.50% by the others.

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