The nub of the Kudankulam problem is it is uninsurable

By Yogi Aggarwal

There is something puzzling and even moving about thousands of fishermen and farmers from Kudankulam in Tamil Nadu opposing the commissioning of the most modern nuclear power plant to be built in India so far. The two nuclear power plants, each of 1,000 mw capacity, will give much needed electricity to a state desperately short of it. There should ideally be no opposition to this marvel of modern technology, but there is.

The agitation against the nuclear plant has been going on for over a year. The Home Minister had blamed ‘foreign’ NGOs for leading the agitation. More than 6,500 FIRs charging sedition  – the largest in India’s history  - have been filed against over 55,000 people  at a single police station.

The government is categorical in presenting its case before the Madras High Court. It claims the reactors, with an investment of Rs 14,000 crore, are “100 percent safe, adequately protected from tsunamis or other natural disasters”. What is not said openly is as important. Under the terms of the December 2008 agreement between Russia and India, the entire liability for accident-related damage must be borne by the Indian operator, the Nuclear Power Corporation of India Ltd (NPCIL). The Russian company VVER, which built the reactors, is free from any liability. And despite the Nuclear Liability Act, which became law in 2010, the Russians would be free from liability for the next two units yet to be constructed at Kudankulam.


In 2005, under pressure from the USA acting on behalf of the nuclear power industry, the government had limited the liability of companies building power reactors to Rs 500 crore, but under pressure from the opposition it was raised to Rs 1,500 crore. In the Kudankulam project, the Russian company is not financially responsible for human damage because of an accident at the reactor. The real burden of any failure will be borne by NPCIL. Or its owner, the government. This is the crux of the problem.

A national asset providing much needed electricity need not be shut down because of public opposition, but neither should the opposition of those living nearest it be ignored. It must be remembered that people living in the neighbourhood of the Kudankulam reactors only began their opposition to the project after the earthquake and consequent tsunami led to the accident at Fukushima in Japan. Kudankulam was in the region of Tamil Nadu that was devastated by the tsunami following the Sumatra earthquake in 2004, and the Fukushima disaster frightened them.

The region is within range of a tsunami as the 2004 experience showed. The Bulletin of Atomic Scientists noted recently, “Disconcertingly, India's new coastal reactors are situated in an  environment similar to that of Fukushima - a tsunami and earthquake zone, with the addition of karst formations, geothermal irregularities, and a lack of emergency water supplies.”

The article is largely based on a scientific study by the People’s Movement Against Nuclear Energy (PMANE) which gives a solid basis for opposing the plant, and proposes instead that the plant could, at low cost, be changed to one which runs on coal or gas.

Even though the Russian reactor was approved in 1989, before the tsunami experienced 15 years later, VVER’s responsibility should take in the worst possible events. No reactor can be 100 percent safe. Every reactor has a small, but finite chance of catastrophic failure, as seen in Chernobyl in the Soviet Union, Three Mile Island in the US and Fukushima in Japan, and many smaller accidents around the world, including India.

That is why no company wants to take the risk of bearing the costs of an accident.  Nuclear projects are non-bankable in the sense that they cannot be insured. If they could, the matter would be simple enough. The project and every person likely to be affected by radiation would be insured for a suitable sum, and the protests would subside once people knew their lives and health will be compensated in case of a catastrophe.  Though the cost of the already expensive nuclear power would increase further with insurance, it would at least reassure the critics.

According to nuclear energy expert Peter Bradford, former member of the US Nuclear Regulatory Commission, “The most implacable enemy of nuclear power in the past 30 years has been the risk not to public health, but to investors' wallets.”  The problem is that while the costs of construction and operation are known, no one wants to bear the cost of a fullscale disaster.

The case of Chernobyl in 1986, the worst nuclear accident ever, shows how bad it could get. The World Health Organisation (WHO) estimated that due to the radiation released during the accident, there were over 9,000 deaths from cancer globally. MV Ramanna and Suvrat Raju, writing in The Hindu, maintain “Many more thousands will have cancers that are assumed to be curable. Even today an area of about 10,000 square km around Chernobyl is under “strict control” because it is polluted by Caesium-137, which has a radioactive half-life of 30 years. A recent study conducted by a team of atmospheric scientists in Europe and the US estimates that the multiple accidents at Fukushima released over 40 percent of the estimated Caesium-137 emission from Chernobyl.”

While the methyl isocynate gas leak in Bhopal in 1984 led to many more deaths and genetic effects similar to that of a nuclear accident, the scale of the disaster was high because the Union Carbide factory was in the centre of the town. The relative isolation of the Kudankulam nuclear facility would limit such nearby damage, but the unpleasant fact is that nuclear radiation can spread over a much larger area, as happened at Chernobyl and Fukushima.

The cost of a disaster and the lawsuits that would result make it virtually impossible to insure a nuclear power plant. The US had stopped the commissioning of all such facilities in the 1980s after the Three Mile Island accident, as the Japanese government is thinking of doing now after Fukushima. While the US declared a nuclear revival in 2009, none of these projects has taken off and have all been mothballed.

Updated Date: Sep 21, 2012 16:03 PM

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