Russia sore at Kudankulam, Sistema issues

Moscow tells New Delhi to maintain stable investment climate
Last Updated 15 October 2012, 19:50 IST

Moscow asked New Delhi on Monday to maintain a stable investment climate and demonstratively help business people to boost bilateral economic relations, irked by the uncertainty over the fate of Russian company Sistema JSFC’s venture in the telecom sector of India.

Russian Deputy Prime Minister Dmitry Rogozin conveyed to External Affairs Minister S M Krishna that the cost of third and fourth units of the Kudankulam Nuclear Power Plant (KNPP) would go up, if New Delhi insisted on bringing them under India’s Civil Liability for Nuclear Damage Act. Krishna said New Delhi and Moscow would be able to thrash out differences to reach ‘a mutually acceptable solution.’

“We should never reconsider the rules of the game once the game has begun. And we should hold the rules till the game is over,” Rogozin said after a meeting with Krishna.

Noting that the Russian 1,000 MWe VVER reactors were the ‘safest,’ Rogozin said that the first unit of the KNPP would start generating power soon, while the second would do so by the end of the next year. Noting that the JSC Atomstroyexport and Nuclear Power Corporation of India Limited had already clinched the credit deal last July for the third and fourth units of the plant, Krishna said that the negotiations were on for the techno-commercial agreements.

India earlier rejected the Russian plea that the new reactors at KNPP should be exempted from the Civil Liability for Nuclear Damage Act as Indian Parliament passed the legislation last year – more than a decade after New Delhi and Moscow first signed an agreement for nuclear co-operation.

Addressing a joint news conference with Krishna, Rogozin warned that the row over the move to cancel the 2-G telecom licenses awarded to Sistema Shyam Teleservices Limited or SSTL – the joint venture of Sistema JSFC and Shyam Group – might discourage Russian companies from investing in India. “It is very important to fulfill the agreements. If there are scandals, that will scare away the business communities,” he said.

The Supreme Court on February 2 cancelled 122 telecom licenses, including 21 of the SSTL, which were awarded in 2008 under the then telecom minister A Raja.

SC stand supreme

Krishna argued that the business community should not be intimidated by ‘certain obstacles that might come up in a democracy’ where one had to go by the ‘due process of law’ and anyone could move a court challenging a particular decision of the government. He did not specifically refer to the row over cancellation of the SSTL’s licenses, stating that since the matter was before the Supreme Court, he should not make any comment. The government would decide in accordance with the directive of the Supreme Court.

The SSTL had filed a curative petition in the Supreme Court last May. The Sistema JSFC invoked the Russia-India bilateral agreement for promotion and mutual protection of investment to seek protection for its investments of $ 3 billion in the wake of the court’s order. The Russian government too has a 17.14 per cent stake in the SSTL.

(Published 15 October 2012, 11:28 IST)

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