WAR IN UKRAINE DELAYS RUSSIAN PROJECTS IN INDIA
Not just defence manufacturing and procurement, but other sectors like nuclear AND thermal power plants AND Fertilizers HAVE BEEN HIT.
The ongoing war between Russia and Ukraine has impacted India not just in defence manufacturing and procurement, but it has also affected other sectors, including strategic ones like nuclear power plants and areas like thermal power plants and fertilizers.
With the Joe Biden-led United States planning to sanction Russian nuclear power supplier Rosatom, the completion of multiple units at the strategic Kudankulam nuclear power project (KKNPP) in Tamil Nadu is likely to be delayed. As per a recent statement given by the Government of India, units 3, 4, 5 and 6 of this project are being set up in cooperation with Rosatom.
As of today, unit numbers 3, 4 have achieved a progress of 58.22%, while units 5 and 6 have just achieved
8.12% completion. Due to the ongoing war and the possible Us-led sanction of Rosatom, the completion of these four units is likely to be delayed even more as the components and equipment needed to be imported from the two countries are likely to be delayed due to the logistical and ocean freight problems arising out of the conflict.
The construction work for units 5 and 6 of the Kudankulam Nuclear Power
Plant commenced in June last year. The construction is originally scheduled to be completed by 2026-2027.
Rosatom and the Nuclear Power Corporation of India Ltd (NPCIL), a public sector undertaking of the Department of Atomic Energy (DAE), are building six power reactors of 1,000MW each at Kudankulam, about 625 km from Chennai. On completion, the Kudankulam Nuclear Power Plant will be the highest nuclear power generation park in the country. Its unit 1 and unit 2 are in operation while units 3 and 4, alongwith 5 and 6 are under construction.
Similarly, NTPC’S Barh Super Thermal Power Project (stage 1 3x660 MW) in Patna, Bihar, that is being built by Russian firm Technopromexport and was expected to become operational from mid-end of 2023, is also likely to be delayed due to difficulty in payments, renewal of bank guarantees due to exclusion of Russian banks from
SWIFT international payments system.
The war has also impacted supplies of balance equipment, material from Russian entities and is likely to impact the visit of engineers, technical advisors from Russia for project commissioning activities.
In the wake of the situation in Russia, India is also facing problems in meeting its requirement of 3 million tonnes of Potash, needed for fertilizers. India’s Potash requirement is totally met by imports from Belarus and Russia. In November 2021,
Russia’s fertiliser exports to India were more than $105 million. Following the developments in Russia, all urea manufacturing units have been directed to maximize their production with some units being asked to produce urea beyond their reassessed and installed capacity. The government is also floating global tenders for fertilizers from other countries
It is pertinent to mention that multiple Indian Oil & Gas Public Sector Undertakings have invested substantially in Russian oil fields. This includes ONGC Videsh Limited (OVL) which has invested in Sakhalin -1, Imperial Energy, Vankorneft. Bharat Petro Resources Ltd (BPRL) has invested in Vankorneft and Taas Yuryakh. Indian Oil Ltd (IOCL), too, has invested in Vankorneft and Taas Yuryakh, while Oil India Ltd (OIL) has bought stakes in Taas Yuryakh, License-61 and Vankorneft.
With the United States planning to sanction Russian nuclear power supplier Rosatom, the completion of multiple units at the strategic Kudankulam nuclear power project in
Tamil Nadu is likely to be delayed. As per a recent statement given by the Government of India, units 3, 4, 5 and 6 of this project are being set up in cooperation with Rosatom.