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Business Report

THE ECONOMIC TIMES IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA

WEDNESDAY OCTOBER 9, 2013

DIPLOMACY: Focus on joint projects, production of commercial aircraft, oil and gas cooperation

STATISTICS

Summit plan: Stage set for pact on Kudankulam III, IV

Ruble/Rupee dollar rates

The leaders of India and Russia are set for their annual summit in Moscow on October 21 when the two sides are expected to seal pact on Units III and IV of Kudankulam power plant and pitch for scaling up economic ties. DADAN UPADHYAY RIBR

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Bilateral trade turnover © EVGENY BIYATOV / RIA NOVOSTI

Russia’s Foreign Minister Sergei Lavrov (right) shakes hands with India’s Foreign Minister Salman Khurshid in Moscow. 0

tributing to boost trade and economic cooperation. In 2012, the trade turnover stood at $11 billion and the two countries have set a target of $20 for 2015. The official also said that India and Russia have recently set a new joint working group

on investment, which held its first meeting in Moscow during the IRIGC session and prepared a list of a dozen of priority joint projects, including a deal under which Russia will produce two types of commercial aircraft in India, a move that would reduce

Billions on the way: Raising the bar for trade

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he India-Russia Trade Investment Forum in St Petersburg in September addressed collaboration in travel and tourism, medicine, and innovation. Ahead of the forum, Indian and Russian specialists held bilateral talks to discuss 22 areas for collaboration, which include, among other things, aircraft engineering, pharmaceuticals, oil and chemistry, aerospace mand natural gas. Alexei Ulyukayev, Russia’s Economic Development Minister, said that bilateral amounts to $11 billion a year but that the two countries have plans almost to double it to $20 billion by 2020. Last year, a list of high-priority joint projects was drawn up, focusing on six areas, and in about a couple of weeks, the working groups will start working on them. The list includes bilateral investment in

ITAR-TASS

nching slowly but steadily towards clinching a major breakthrough on the deal to remove the barriers for the construction of units 3 and 4 of the Kudankulam Nuclear Power Plant (KNPP), India and Russia have decided to move ahead with new joint projects in different fields to boost investment and annual trade turnover. The decision was taken at the 19th meeting of the Indo-Russian Inter-Governmental Commission (IRIGC-TEC) on Trade, Economic, Scientific, Technological, and Cultural Cooperation on October 3-4. External Affairs Minister Salman Khurshid and his Russian counterpart Deputy Prime Minister Dmitry Rogozin led their respective delegations at the talks. The IRIGC-TEC meeting in Moscow followed Indo-Russian trade and investment forum meeting in St Petersburg on September 20, at which Rogozin and India’s Commerce and Industry Minister Anand Sharma focussed on identifying joint manufacturing projects in high-tech areas. An Indian official closely involved in finalizing the draft agreement on the KNPP’s units 3 and 4, told this writer, on the condition of anonymity, that the deal is expected to be ready for signature during the annual summit of Prime Minister Manmohan Singh with Russian President Vladimir Putin on October 21, in Moscow. “At present, the sides are engaged in working out a formula, including the ‘language and legality,’ to reconcile the civil nuclear liability law, to waive the liability clause for units 3 and 4, not setting any precedent for the US and France to ask for similar exceptions,” he said on the sidelines of the joint press conference addressed by Khurshid and Rogozin after the plenary session of the IRIGC. The two sides also signed a protocol, highlighting the main areas of future cooperation. “Our work with you has been extremely satisfying. We have come to farreaching arrangements in many important fields of bilateral cooperation and collaboration, in particular, in the fields that are extremely important for multifaceted growth of cooperation, including aviation and civil nuclear energy,” said Khurshid. “Russia and India have achieved a new quality of trade and economic cooperation in the last five years,” Rogozin said, stressing that the two countries must take “decisive measures” to assure stable growth in bilateral trade.He was referring to his statement at the meeting that in the first six months of this year, the bilateral trade turnover has declined and the two sides were discussing several initiatives aimed at significantly con-

Alexei Ulyukayev. automotive projects (engaging KAMAZ), aircraft construction (involving the United Aircraft Corporation and Russian Helicopters, oil and chemistry (Sibur). “Indian companies will mostly invest in the raw materials industry and pharmaceuticals, about $8 billion, whereas Russia will invest an estimated $4 billion in telecoms,” said India’s Minister of Commerce and Industry Anand Sharma.

production cost by 40 percent. The deal concerns both the Sukhoi Superjet 100, now being built in Russia, and the next-generation Irkut MS-21, which is slated to start production soon. Another project concerns the construction of an oil pipeline from Russia to India across the Central Asian Countries, Afghanistan and Pakistan. During the IRIGC meeting, the sides agreed to create a Joint Study Group (JSG) to build this pipeline. At the meeting, the two sides are also understood to have finalised the programme of cooperation in the field of oil and gas on the Yamal Peninsula in northwest Siberia. A consortium of OVL, the overseas arm of the ONGC, the IOC and Petronet LNG Ltd has been in talks for the last few years to buy about 9 percent stake in Russian natural gas producer Novatek’s $20 billion Yamal project. At the IRIGC meeting, the Russian side, for the first time, evinced a “serious interest” in the Delhi-Mumbai Industrial Corridor (DMIP), being built with Japanese assistance. India invited Russian companies to take part in setting up at least one industrial enclave at the DMIC. India also pushed for negotiations to be started with the Customs Union of Belarus, Kazakhstan, and Russia over a free trade zone. Russia has already supported this proposal as India’s CECA with the Customs Union would lead to higher imports from India.

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Russia’s exports to India

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BIG PICTURE

What US shutdown means for India M. K. BHADRAKUMAR Foreign policy analyst

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he shutdown of the US government is beginning to play out in the international arena. The cancellation of President Barack Obama’s Asian tour to attend the annual summit of the Asia and Pacific deepens the scepticism of the regional states regarding the efficacy of the US’ rebalancing strategy in Asia. The “pivot” to Asia is becoming unsustainable in terms of both the financial burden it carries as well as the Obama administration’s own order of priorities. The dysfunctional nature of the US political system makes the Obama administration’s agenda to push for a Trans-Pacific Partnership agreement much harder. Meanwhile, the cancellation of Obama’s tour has taken a toll on the efforts to steamroll a peace process in Syria. The Kremlin was

looking forward to a meeting between President Vladimir Putin and Obama on the sidelines of the Brunei summit, with Syria in focus. The work by the experts from the Organisation for the Prohibition of Chemical Weapons is proceeding according to plan but a political underpinning is urgently needed in the nature of a peace process without which the civil war conditions in Syria may aggravate and new flashpoints may arise. A Putin-Obama meet would have helped at this point. Moscow seeks an early Geneva 2 conference that brings together the Syrian protagonists and Washington needs to prevail upon the US’ regional allies in the Middle East to roll back their covert military-financiallogistical support of the Syrian rebel groups. Doubts are bound to rise in the

Iranian mind regarding Obama’s political muscle to carry the noncooperative Congress along if he were to engage. An incremental approach is needed to untie the knots of the US-Iran standoff. While in Tehran there seems to be unity of purpose following the election of Hassan Rouhani as president to negotiate with the Obama administration in a spirit of “heroic flexibility”, the same cannot be said about the alchemy within the political establishment in Washington where the White House and the Congress are not on the same page on Iran. Closer home, the uncertainties over the post-2014 scenario in Afghanistan are deepening. The gnawing doubts in the Afghan mind about the dependability of the US to fulfill commitments have held back the conclusion of the status of forces agreement and that, in turn, may prompt the Obama administration to exercise the so-called “zero option”, which is to withdraw all troops and leave the Kabul government on its own. Without any troop presence, the US may not have the motivation to extend financial support for the Afghan economy, which critically depends on foreign aid for survival. India cannot remain unaffected by these unseemly trends. India needs to think the unthinkable, namely, the era of American dominance on the world stage is ending. What is unfolding is a global transformation process that is redrawing the power dynamics and

the global balance of power. The US may remain the biggest military power and, arguably, the country with the biggest reach and influence in world politics, but it is not necessarily any longer the lead player. Indeed, in his address to the UN General Assembly a fortnight back, Obama candidly admitted the limits to American influence. The harmony in the international system depends on the accord between the leading actors such as US, Russia and China and the rising powers, which includes India. India needs to adjust to this emerging reality. Yet, there are disquieting signs. The Indian policymaker reminds one of the deer crossing the highway and is transfixed by headlights of vehicles speeding past. The mantra remains, “The India-US bilateral relationship is embedded in a larger vision of a global strategic partnership.” The foreign-policy elite cannot keep a closed mind, holding on to ingrained ideas and old assumptions rooted in “unipolar predicament.” The simple mathematical truth is, Asia is shifting gear to global leadership, thanks not only to its economic dynamism but also due to the deep social and intellectual ferment that is under way – and, it is to Asia that India belongs.

Read the author’s blog indrus.in/blogs/realpolitik


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IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA

Business Report WEDNESDAY OCTOBER 9, 2013

MINING: The stock float may ignite interest of Indian companies specialising in cutting small diamonds

NEWS Russia offers 1-year guarantee for INS Vikramaditya

Alrosa bets big on over $1 bn IPO OLGA ALEXEYEVA, PAUL SMORSCHKOV Gazeta.ru

First gemstones buyer-seller meet to be held in Jaipur The Gem and Jewellery Export Promotion Council of India is organising the first ever Coloured Gemstones Buyer Seller Meet (BSM) with Russia on December 8-11 at Hotel Lalit, in Jaipur. More than 15 select coloured gemstones and jewellery manufacturers from India and Russia will participate in the meet, which will include exclusive discussions and one-to-one meetings with traders and factory visits in Jaipur. RIBR

Indra joint military exercise set for October 18-28 Indra 2013, an annual joint military exercise between India and Russia, will be held in India between October 1828, the spokesman of Russia’s Eastern Command, Alexander Gordeyev, told ITAR-TASS. The joint exercise will be conducted at the Mahajan field firing range in Rajasthan and involve about 250 paratroopers of Russia’s Eastern Command formation deployed in the Republic of Buryatia. RIBR

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lrosa, the Russian diamond monopolist and the world’s largest producer of diamonds, has officially announced an initial public offering (IPO), which may start in the next two weeks. Investors will be offered 16% of the securities whose value could exceed $1.3 billion. “For a market, $1 billion is quite an acceptable size for investors,” Alrosa’s CEO Fyodor Andreev said in an interview with a news channel in Moscow. The company is going to offer the securities to small financial investors, not the “strategic buyers”, which could negatively affect the stock price after the placement, according to the experts’ warning. The company said it will announce the offering price for the securities in the next two weeks. The securities will be allocated to the Moscow stock exchange, and as a part of this allocation, they will also be offered to investors in the US. The Russia’s Federal Property Agency (Rosimushchestvo) and the “RIK Polus” owned by the Yakut government will be offered 7 per cent of shares and a further 2 per cent is going to be sold by Cypriot Wargan Holdings Limited, a subsidiary of Alrosa. The money raised from the place-

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Russia could agree on a deal to start assembling Sukhoi Superjet 100 and Irkut MS-21 passenger jets in India, an official at the Russian Economic Development Ministry has said. Russia is considering a number of projects to promote the country’s airliners “with the possibility of cooperating in their production,” said Yevgeny Popov, who heads the ministry’s department of Asia and Africa. RIBR

Kamaz wants to use Soviet debt to promote trucks

Russian Guild of Jewelers, hopes that Alrosa’s shares will ignite enthusiasm of Indian companies. “India is famous for its small diamonds. It often happens that Russian small stones are sent there for cutting and they return as ready diamonds. Russia imports from India a lot of sapphires, rubies, tourmaline. The volume of imported materials is quite big, and we are very interested in a partner like India”, he says.

European giants at Arms Expo The RAE showcased JVs between Russian and Western firms.

The ONGC-led consortium is competing with Japanese companies for 10 per cent stake.

SERGEI PTICHKIN RIBR

ELENA KHODYAKOVA

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ussia’s largest independent natural gas producer Novatek is close to selecting its third partner for Yamal LNG, Vedomosti, a Russian business daily, has learned from two sources close to the project. Two consortia from India and Japan are competing to buy a 10 per cent stake. Negotiations are close to completion, adds a reliable source. “According to our information, the final partner has already been determined, in the near future it will be introduced to the other project participants for approval,” says another source. One of the two candidates is an Indian consortium comprising ONGC Videsh Ltd (OVL), Indian Oil Corp (IOC) and Petronet LNG, Nimal Kumar, representative of OVL told Vedomosti. In early September, the Indian media reported that this consortium was negotiating for the purchase of 15 per cent, but had to settle for a smaller stake. The second candidate is Mitsui and Mitsubishi. The Russian delegation led

by Minister of Energy Alexander Novak will be heading to Japan soon for negotiations on the project. Yamal LNG is an ambitious project for the development of the South Tambeyskoye field with proven deposits of 1.3 trillion cubic meters of natural gas and the construction of three lines of a natural gas liquefaction plant (LNG) for producing 5 million tonnes each per year. The launch of the first line is scheduled for the end of 2016. Yamal LNG should reach full capacity in 2018. Novatek has never disclosed the cost of the project, which has the potential to break Gazprom’s monopoly. It was estimated at $23 billion by UBS and at about $20 billion by Investcafe. Novatek has been looking for partners for the project for two years. The first was French energy major Total. It bought 20 per cent for $800 million. The company will spend $500 million more on the implementation of the project. In summer, Novatek announced that China’s CNPC would get another 20 per cent. The companies are expected to close the deal by December 1, after obtaining the neces-

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military expo held last month reflected an increasingly active engagement between Russian and foreign arms makers. Nizhny Tagil, Russia’s tank-building capital, hosted Russia Arms Expo 2013 in late September. For the first time since it was first held more than 15 years ago, the expo featured a variety of exhibits by leading European weapon makers, including Nexter, Renault and Safran. The Russian version of the Austrian DA42 MPP Guardian, which is moulded largely of composite materials, was displayed at an open platform. The ATOM concept was a sensation at RAE 2013. The infantry fighting vehicle has been jointly created by French and Russian specialists. The 30-tonne vehicle has a 6-kilometre range and can fire 140 rounds a minute. In another first, the exhibition featured combat modules developed in partnership with foreign specialists on the basis of western military technologies. Russia’s Oruzheynyemasterskie, Kovrov Mechanical Plant and Italy’s OTO Melara created HITROLE-L, a combat module mounted on the wheeled armoured vehicles Tigr, Volk and Medved. The remote-controlled module can direct the fire of 12.7 mm and 7.62 mm machine guns and antipersonnel grenade launchers. Dmitry Galkin, general director, Oruzheynyemasterskie, is upbeat about exporting the Russian-Italian module, especially to countries that have both Western and USSR-made arms in their inventories, as well as arms imported from Russia.

The Yamal plant, which seeks to produce 5 million tonnes of LNG annually, could be a gamechanger, and may end Gazprom’s monopoly. sary approvals. Given that Novatek wants to retain the controlling stake in Yamal LNG, not more than 10 per cent minus 1 share is left for the third candidate. Gennady Timchenko, a coowner of Novatek, told Vedomosti that CNPC and other participants “would join the project on the same parameters as Total”. Novatek can get about $1.2 billion for nearly 30 per cent of shares of Yamal LNG. Novatek is interested in attracting those companies that are interested not only in the production and liquefaction of gas, but also in purchasing it, says Sergey Vakhrameyev, senior ana-

lyst at IC Ankorinvest. Based on these criteria, he says that the Japanese companies have the best chance to win the deal. Both Japan and India can import LNG from the Yamal project, but only via the Northern Sea route that is 5,770 nautical miles long, says Nadezhda Malysheva, Director for Development of the Portnews News Agency. The Indian consortium stands a good chance since the CNPC would likely object to Japanese participation in the project, a source said, adding that India is making a strong pitch to get greater access to oil and gas from Russia.

The art of video ads: Virool shows the way The 25-year-old Alexander Debelov has reinvented web advertising by matching ads with the right audience. His online-service now boasts of 127,000 clients and monthly sales of $1 million. RIBR

Kamaz would like to use India’s rupee-denominated debt to Russia to promote the sales of trucks made by its assembly plant in Tamil Nadu, a Kamaz official told RIBR. The auto manufacturer has proposed allocating $100 million of the debt to set up a specialised state-owned finance company to provide loans to buyers of Kamaz trucks in India. RIBR

Indian buyers may also aspire to get shares. Eighty per cent of sales of ALROSA’s are small diamonds of 0.10.2 carats. The Indian diamond industry is specialising in cutting such diamonds and boasts 95 per cent of this market in the world. Last year, Alrosa entered into a new long-term agreement for the supply of rough diamonds with India’s Rosy Blue. Gagik Gevorkyan, chairman of the

High stakes: India joins race to buy stake in Yamal LNG

MARIA KARNAUKH

SERGEY SAVOSTIANOV / RG

mining, and the trading volume should increase, projects the expert. The price per share in the IPO could reach 40-42 rubles ($1.25–1.31), predicts Sergey Goriainov from the Rough & Polished agency. Many investors, including China’s large jewellery brands, Chinese funds and the diamond mining De Beers, were interested in purchasing a large block of securities, says Goriainov.

ENERGY: Negotiations are close to completion, a decision on third partner soon

Vedomosti

Deal to assemble Sukhoi, passenger jets in India

Diamonds are forever: Will Indian companies also be picking Alrosa’s shares?

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re you annoyed by video ads on YouTube, or between levels in online games? Today, advertisers use every opportunity to draw your attention to their product, whether you like it or not. The 25-year-old startupper Alexander Debelov knows to whom and when to show online ads. People in his company work hard to show just the ‘right’ ads to the right people. Now his company, Virool, rakes in about $1 million each month from promoting video-ads on the Net. “We promote viral video trailers for films, music videos and commercials on the Internet,” says Debelov. “The

secret of success is to show content to the right audience.” The clients place their videos on the website www.virool.com and select options for its promotion – and if they desire, the Virool support team provides the necessary consultation. “We offer an audience based on the characteristics of each product – advertising of online games will not increase sales if it is placed on a site that is visited by women in their forties. What is needed, is a resource that is popular with teenage users – for example, the pages of popular bloggers or on a website providing free online games,” says Debelov. The first person to believe in the Virool project was no other than the American rap star Snoop Dogg.

Together with the then budding musician Candyman, they booked their first joint promotion video with the novice startups to the tune of $30,000. To date, the site has signed up 127,000 clients (publishers). “Most of our advertisers are American companies. However, we have proven our worth not only in the US – we are constantly approached by major clients from Australia and Canada, as well as smaller publishers with budgets of less than $10,000 – from Spain, Turkey and Portugal,” says Debelov. Among the top clients are the computer giant Intel, jewelry producer Pandora, maker of games for facebook.com – the Sinco Company, Heineken beer. Virool is bringing its creators $1 million every

month. One viewing, brought in by Virool, costs 10 cents. Anyone can use the service – be it budding musicians who have decided to spend $100 on the promotion of their first video on YouTube, or a beer concern like Heineken, which collects two million viewings per week. Virool is now a big draw with investors. The company, after becoming a resident of the business incubator Y-Combinator, received the largest seed investment – $6,620,000 provided by Dave McClure (former marketing director of PayPal, founder of 500 Startups), Yuri Milner (known for having invested money into Facebook, Twitter, and Mail.ru Group) and other leading venture capitalists.

TATIANA ANDREEVA / RG

The INS Vikramaditya, which will be handed over to the Indian Navy in November, will come with a oneyear guarantee, a newspaper said. During the guarantee period, Russian engineers would be stationed in India to take care of “every single screw of the ship,” the paper quoted Victor Komardin, Deputy Director-General of Rosoboronexport, as saying on the sidelines of NAMEXPO-2013 in Kochi. RIBR

© SERGEY KRASNOUKHOV / RIA NOVOSTI

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ment of 2 per cent of shares will be spent by the diamond miner to pay off its debt, says a company official. The coordinators of the company in the public offering were Goldman Sachs International, Morgan Stanley and “VTB Capital”, and the order book will be kept by “Renaissance Capital”. After the sale of 7 per cent share portfolio, Russia and Yakutia will remain the owners of 43.9 per cent and 25 per cent of shares respectively. Another 8 per cent of Alrosa is owned by eight uluses (districts) of Yakutia, the hub of the company economic activities. Alrosa’s employees and other individuals own 4.2 per cent of shares; and legal entities own 4.8 per cent. Alrosa is the world’s largest company in terms of diamond mining (34.4 million carats in 2012). Experts expect that the shares will be placed approximately at the current market price. Alrosa’s market capitalisation is estimated to be $8.1 billion. Thus, the federal government and the government of Yakutia could attract $0.58 billion each, while Alrosa will receive an additional $ 0.16 billion, while the total volume of the IPO is estimated at around $1.3 billion, according to BKS’s Oleg Petropavlovskiy. After the placement of shares, the company’s free float will amount to $1.9 billion – one of the highest levels in the Russian sector of metallurgy and

SHUTTERSTOCK/LEGION-MEDIA

World’s top diamond miner plans to issue 16% of its shares as IPO to small financial investors.


IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA

E |N |E |R |G |Y

Business Report WEDNESDAY OCTOBER 9, 2013

INSIGHT

POWER: India, Russia likely to seal pact on units III and IV at a summit in Moscow

KNPP: Optimum safety ensured

Kudankulam’s energy boost for southern India Tamil Nadu, Kerala, Karnataka and Puducherry are expected to share power from Unit I of KNPP

ANDREI REZNICHENKO Expert

AJAY KAMALAKARAN RIBR

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very prominent global company has recently introduced a new version of its super popular smartphone, whose characteristics can no longer be called revolutionary. It has become incrementally better, that is all. Speakers at the presentation talked about the new colour scheme, the new nonessential functionality and even the price. Yet not a word was uttered about security for its data storage and access. But is it possible to launch an innovative product these days that does not meet the strictest security requirements? The more high-tech civilisation becomes, the better its security technologies and systems in all areas, whether on a personal scale, as in smartphones, or at big industrial and energy projects. India possesses a highly developed nuclear power infrastructure, so it is little wonder that the country’s most advanced nuclear power plant, the Kudankulam NPP, has been built around the maximum safety principle. Generally, nuclear power plant safety systems and nuclear technology in general are in a state of constant flux. Russiandesigned water-water reactors are arguably the world’s most reliable. The VVER design is based on the principle of the power unit’s self-protection stemming from the reactor’s neutron and physics characteristics, which automatically abort fission in any emergency, no matter what the operator is doing. The Kudankulam NPP’s power units are equipped with a number of independent safety barriers, including a double-layer containment con-

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which are innovative in design. The passive heat removal system can remove the decay heat from the secondary side to naturally air coolant heat exchangers placed over the containment. The project is also expected to bring several benefits to the people in the adjoining districts of Kudankulam. India’s former president Dr A. P. J. Abdul Kalam submitted a 10-point plant to the government of India that would dramatically improve living conditions in the area. The salient features of the plan included the construction of a four-lane highway connecting Kudankulam and villages 30 km around it, with Madurai, Tirunelveli and Kanyakumari; a premier hospital with over 500 beds; mobile medical facilities to locals and creation of 10,000 jobs to people with a 60 km radius of the plant as well as bank loans to youth with upto 25 per cent subsidy. The Nuclear Power Corporation of India says the second unit of the KNPP is 95.5 per cent ready. The reactor is expected to be operational from June 2014. With 2000 MW coming out of the two reactors from the middle of next

year, southern India’s power gap will be greatly filled. Russia and India are also in negotiations over the construction of the units III and IV of KNPP, with an agreement likely to be reached when the two countries hold their annual summit in Moscow on October 21. India’s civil nuclear liability legislation, which allows the nuclear operator the right to demand compensation from a supplier in case faulty equipment causes an accident at a nuclear power plant, has created some issues for the Russiabuilt reactors. Moscow has demanded far higher prices for the additional units at Kudankulam since they would come under the liability law, but that would still work out cheaper vis-a-vis Russia’s competitors. Sources tell RIBR that Russia is looking to charge India around Rs 6 per kilowatt-hour (kWh) for the second and third units of KNPP, while American companies that want to have a presence in the Indian market are looking at Rs 12 per KwH. India and Russia have firmed up a roadmap for building about 16-20 reactors with Russia’s assistance.

BRICS lead in NPP construction

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esidents of the rapidly industrialising state of Tamil Nadu are set to get a respite from frequent power cuts with the launch of commercial operations of the first unit of the Kudankulam Nuclear Power Plant (KNPP), which is expected in Octoberend. The state, which hosts the plant built under Russian assistance at Tirunelvelli district, will get 562.5 MW. Karnataka will get 221 MW, Kerala 133 MW and Puducherry 33.5 MW, while 50 MW will be unallocated. KNPP has the first pressurised water reactor belonging to the light water reactor category in India. In the wake of the 2011 Fukushima disaster, the project saw large-scale protests that India’s intelligence bureau said were the handiwork of NGOs on the payroll of agencies in foreign countries. Minister of State in the Prime Minister’s Office V Narayanaswamy said recently that India’s Home Ministry has taken action against some companies with links to foreign-funded NGOs. “Even now, certain groups and people who retired from the department of nuclear energy and some outside people with the aid and support of foreign agency have been trying to scuttle our nuclear energy programme,” Narayanaswamy said on the sidelines of a recent conference. The groups opposed to the project went as far as the Supreme Court to stop the project. While rejecting a petition to stop work on the project, the court declared that the “Kudankulam plant is safe and secure and it is necessary for the larger public interest and economic growth of the country.” The court also observed that nuclear energy is extremely important for the country’s growth and a balance has to be struck between the right to life and sustainable development. Leading scientific experts have already vouched for the safety standards of the project, stating that superior technology and exceptionally high quality equipment used in the reactors at Kudankulam made them unique in the global nuclear industry. The KNPP, which has Generation 3+ type reactors, have passive safety measures,

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RICS nuclear cooperation looks promising. Today BRICS countries account for a massive 70 per cent of new NPP constructed globally with Russia as a leader in nuclear technologies among BRICS members. China has 29 nuclear reactors under construction with another 51 scheduled, Russia - 10 and 24 and India - 7 and 18, respectively. South Africa is planning to build 6 reactors (9,6 GWt) by 2030.

sisting of inner and outer shells. The outer shell protects the reactor from external impact and can withstand a plane crash, a tornado, a hurricane, icing, flood, or a terrorist attack. The inner shell keeps radioactivity trapped inside in the event of a beyond design basis incident. The NPP’s safety channels feature dedicated diesel generators that are designed and located to operate even when flooded. Should the above-mentioned safety systems fail, the VVER is equipped with a beyond design basis event management system. It includes a hydrogen removal system, a first circuit pressure surge protection system, a passive steam generator based heat sink for the protective shell, and a core catcher. Besides regular electromechanical protections and a unique core catcher, however, the Kudankulam NPP features a fast-acting boron injection system. “The way it works is that, in the event of an alarm, we promptly pump boron concentrate into the reactor’s first circuit. Fast boron injection is passive protection: the solution is pumped because of a pressure difference. Valves that need to be opened are the only active element there. Yet these are fast-acting valves that only take six seconds to open,” says Mikhail Nikitenko, Gidropress’deputy chief designer. Scientifically speaking, quick boron injection helps control fission intensity in water-water nuclear reactors. The passive safety system needs no energy to power it and contains no revolving components. If the external power supply is lost entirely, it will stop the reactor and ensure that any residual heat is dissipated through the laws of physics.

Russia to build first n-plant in Bangladesh

World’s first floating atomic plant blazes a new trail The pilot project has created much interest, with 15 countries, including China, Malaysia, Indonesia, Namibia and Argentina, keen on buying it. ANDREI KISLYAKOV RIBR

The world’s first floating NPP

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n a pioneering move, Russia is set to build the world’s first floating nuclear power plant, which could fructify an idea that was first experimented with by the US over half a century ago. Unfazed by green activists, Russia began constructing the first floating nuclear power plant, Academician Lomonosov, in 2009, at the Baltic factory in St. Petersburg. The equipment, including nuclear reactors, is being installed on the readymade framework of the ship. The ship has a displacement of 21.5 tonnes and a team of 69 people is required to service it. The first team will be trained at the Makarov State Maritime Academy in St. Petersburg under the leadership of former nuclear fleet sailors and will last two years. Academician Lomonosov will generate upto 70 megawatts of electric energy and 300 MW of thermal energy, which is enough to sustain a city of 200,000 people. Furthermore, a floating nuclear power plant can be used as a distiller, producing upto 240,000 cubic meters of water daily. The floating atomic plant has generated much buzz and interest worldwide. “We already have prospective international customers, but they want to see how the pilot project is

The power unit is a non-selfpropelled vessel with two KLT-40 reactors. Hydraulic engineering installations safeguard the water area, where the floating NPP is deployed. Shore facilities: a transformer substation, heat substation and power/ heat receipt and transfer units.

Floating NPP’s characteristics Capacity (electricity) 70 MW Capacity (heat) 140 Gcal/hour Length/Width 144m/30m Displacement 21,500 tons Draft 5.6 m Service life 38 years Payback period 7 years Operating staff 58

implemented,” says Sergei Kirienko, CEO of the state-owned corporation Rosatom. Fifteen countries, including China, Indonesia, Malaysia, Algeria, Namibia and Argentina, have already expressed interest in buying a floating nuclear power plant. The floating nuclear power plant is a non-self-propelled vessel with two reactor units. A tugboat will transport it to its destination point. It is planned that Academician Lomonosov’s first parking spot will be one of the hard

to reach north-eastern regions of the country – Kamchatka Krai, Chukotka or Yakutia. These regions are the ones that suffer from a severe energy crunch, which hinders their development. According to expert estimates, the construction and operation of such a plant is much more profitable than that of a nuclear power plant, which will provide a high demand for the products.However, safety remains a key concern. Given that the project is

based on Russia’s vast experience of operating a fleet of nuclear-powered icebreakers and submarines, its safety standards are very high. With nine nuclear-powered icebreakers, Russia’s fleet is the world’s strongest. Nuclear-powered icebreakers have turned the Northern Sea Route into a well-traveled artery supporting year-round navigation in the West Arctic. It’s in the polar regions that nuclear-powered engines demonstrate their advantages, because icebreakers continuously have to operate at full throttle. Floating nuclear power plant is designed with a large safety margin that exceeds all possible threats and makes nuclear reactors invulnerable to tsunami and other natural disasters. Floating nuclear power plant, as opposed to stationary nuclear power plants, will not leave any problems in the form of “nuclear legacy”: it is brought to the right place where it supplies power or heat for the required time, and then it floats away, without leaving any damage to the ecosystem. In addition, nuclear processes in ships meet all the IAEA’s (International Atomic Energy Agency) requirements and do not pose any threats to the environment. At the IAEA International Atomic Energy Agency conference this summer, Deputy Prime Minister Dmitry Rogozin conjured up a bright vision of nuclear power. “Last year, Russian NPPs produced a record amount of electric energy – 177.3 billion kilowatthours, 16 per cent of the country’s total consumption. By 2030, we plan to increase this fraction to 25-30 per cent, in particular due to the new floating nuclear power plants.” Floating power plants could thus become a unique national project: if successful, Russia will remain the world’s main energy supplier.

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INNOVATION: Academician Lomonosov will generate upto 370 MW of energy

Rosatom-assisted nuclear power plant will be completed in 2018 and help ease energy crisis. KSENIA SHVETSOVA RIBR

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aking a cue from India, Bangladesh is looking to ease its energy crunch by opting to build its first nuclear plant, which is being designed with the help of Russian finance and technology. On October 2, Bangladesh took its first tangible step in this direction as the foundation stone of the Rooppur atomic plant was laid by Prime Minister Sheikh Hasina Wajed and Rosatom Corporation CEO Sergei Kirienko. Located 160 kilometres from Dhaka, the atomic power plant will be spread over an area of 105 hectares. The plant is expected to resolve the acute power shortages faced by Bangladesh, a country of 160 million. The Rooppur nuclear power plant will be completed in 2018; it will host two Russian-made reactors of around 1,000 MW each. Bangladesh hopes to add 20 GW of installed capacity by 2021, with the share of nuclear power plants reaching about 10 per cent and rising to 19 per cent by 2030. China and South Korea had earlier offered to provide both financial and technical support to build a NPP in the country, but it was Russia which

finally got the green light on the deal. The ice broke in January when Sheikh Hasina met Vladimir Putin in Moscow. The two signed an intergovernmental agreement to provide $500 million Russian loan to finance engineering surveys, design and personnel training for the Rooppur plant. Another loan of about $1.5 billion was discussed to fund construction. Russia inherited good relations with Bangladesh from the Soviet Union, which supported the country’s independence from Pakistan in 1971. Rosatom has said the Rooppur would meet all the latest international safety standards developed since Japan’s Fukushima power plant disaster over two years ago. The power units will get a passive heat removal system and a double safety shell that can withstand a fall of an upto 200 tonne aircraft, upto a magnitude 8 earthquakes, hurricanes and tornadoes. Providing loans to build nuclear facilities abroad is a common practice, says Alyona Yakovleva, head of Russia’s Nuclear Energy Society. “The service period for the type of power plant planned in Bangladesh is a minimum of 60 years, over which the country will gradually pay the loan. Moreover, Russia will provide uranium for the plant and will dispose off the used reactor fuel. The services will be paid for by Bangladesh,” says Yakovleva.


IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA

S |O |C |I |E |T |Y

Business Report WEDNESDAY OCTOBER 9, 2013

POLITICS: A few independent women leaders are emerging, but public opinion remains divided on role of female politicians

Women on top? Such a long way to go Gender imbalance remains glaring in Russia’s politics and government, largely due to the patriarchal nature of society and inbuilt biases.

VLADIMIR PUTIN

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n the age of women empowerment, Russia sadly lags behind. Women make up less than 14 per cent of deputies in the State Duma, with 61 seats out of 450. In comparison, there were 143 women elected to the British House of Commons in the 2010 general election out of 650, 22 per cent of MPs. According to this year’s data from the Inter-Parliamentary Union (IPU), Russia was one of the lowestranked countries – at 98, just ahead of Guatemala and Romania – in terms of women’s participation in politics and decision-making processes. Besides, Russia’s women politicians are not seen as having a lot of influence, and none of them were listed in the Forbes ranking of the world’s most powerful women. Olga Kryshtanovskaya, an expert on the Russian political elite and former member of President Vladimir Putin’s United Russia party, says the patriarchal nature of Russian society is to blame for the low levels of women’s political participation. She says some high-profile male politicians have only “let in” women politicians who do not have their own opinions, who look good and are essentially puppets of more powerful men. However, all is not lost. Kryshtanovskaya believes that strong and independent-minded female leaders are now starting to emerge in Russia. One recent example is Elvira Nabiullina, former minister for economic development, who this year was promoted by President Putin to lead Russia’s Central Bank. Still only 49, Nabiullina stands out internationally as the first woman to head a Group

“I don’t know if the male-female ratio should be defined by law. It’s important to appoint the most suitable person, based on their personal and professional qualities. However, there’s definitely a lack of women politicians in the government.”

IRINA KHAKAMADA 2004 presidential candidate

Making it: Valentina Matvienko, head of the Federation Council, is one of the few women polititians holding high positions in Russia. registered For Women of Russia Party. But the group positions itself as nonfeminist. The party has about 100,000 members and promotes the “restoration of family values”. The western feminist movement

deputy Elena Mizulina is one prominent figure who promotes the idea. Kryshtanovskaya, however, says that electoral rules should be equal for all. She adds, somewhat ironically: “Russian men are dying out at

Women make up less than 14 per cent of deputies in State Duma, with just 61 seats out of 450

Russia has no prominent political parties that make women’s rights a part of their platform

bypassed Soviet women and feminism has failed to gain much traction even in modern Russia. There have, however, been calls for the implementation of quotas for women politicians, and

a rapid pace.” In 2011, Russia’s thenminister for health, Tatyana Golikova, announced at a meeting with the UN High Commissioner for Human Rights, Navanethem Pillay, that Russia

LITERATURE: Kurup’s poems and life bear striking similarity to that of Pushkin

One sun, one sky, one earth: Building poetic bridges Iconic poet says Indians feel special affinity for Russian literature ELENA KROVVIDI RIBR

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conic Malayali poet and Russian classical literature translator O.N.V Kurup visited Moscow in September, the time of “golden autumn”, the favourite season of his favourite poet Alexander Pushkin. It was his third visit to Russia, but as he puts it himself his impression of the country will never change. “What is your impression of the sun when it rises or when it sets?” asked Kurup emphatically. “The sun remains the same. It was the Soviet Union earlier, now it is Russia. But my impression of Russia is purely cultural and literary, as the land where Pushkin, Tolstoy, Dostoyevsky, Chekhov and many other writers came from, and not political.” The Gorky Institute of World Literature published Kurup’s book “One Sun. One Sky. One Earth,” a collection of 50 poems translated into Russian. After his first visit to Moscow in 1978 for the celebration of the 150th birthday of Leo Tolstoy and the second visit as the Sovietland Nehru awardee for promoting Indo-Soviet friendship, the poet’s latest journey underlined

Malayali poet O.N.V. Kurup with India’s ambassador to Russia Ajai Malhotra during Kurup’s 10 day visit to Russia. the poet’s profound engagement with the Russian culture. “Definitely, my favourite Russian poet is Pushkin because we share the same poetic sensibility. His tragedy was very much felt by me as if it happened yesterday. During his life he had to suffer insult, suffer from power,” Kurup told RIBR in an interview. Kurup stressed that

the poetic images in Pushkin’s poems were very close to his heart. He singled out Pushkin’s “Evgeny Onegin,” poem saying that Pushkin was at his best in his lyrics. Even though Kurup and Pushkin belong to different countries and epochs, there are striking similarities in their life and poetry. According to Indian politi-

cian and philosopher P. Govinda Pillai, Kurup also had to face harsh and unreasonable criticism of the revolutionary content of his works. Similarly, the poetic language of both Pushkin and Kurup was enriched by folk influence, beautifully entwined in the classical literary language. Passionate striving for freedom is yet another trait that brings Pushkin and Kurup together. In Kurup’s book of poems, there is a poem written to Pushkin. Addressing Pushkin, Kurup says: “Pushkin, you’re immortal” and he goes on to describe why Pushkin is immortal. Kurup also found a parallel between the thoughts of Russian writer-sage Leo Tolstoy and Lord Buddha, who both escaped from the secular world and searched for ultimate truth and enlightenment. In his poem dedicated to Tolstoy, Kurup described evocatively his pilgrimage to Tolstoy’s estate Yasnaya Polyana. The Malayali connoisseur of the Russian literature also spoke glowingly about Dostoyevsky, who was “trying to bring light to the corners of human mind.” He underlined that Indians feel a special affinity for the Russian literature. “Pushkin is very much loved by us as a great poet because he appreciated liberty and beauty, all things of beauty: the beauty of nature, the beauty of woman, the beauty of landscape and the beauty of human virtues.”

was preparing a gender equality bill. However, the adoption of the bill was put on hold; a similar bill was approved by the State Duma in 2003, but blocked by the executive branch. Female politicians in Russia, as in many other countries, are often subject to sexist coverage in the mainstream media and blogosphere. Undermining them by ridiculing or unduly focusing on their appearance and making allegations about their sexual relationships with male politicians is common. The former gymnastics star Alina Kabayeva is a case in point; when she was elected to the Duma, she was linked in the tabloids to Putin himself, a rumour that continues to dog her despite constant denials.

ITAR-TASS

RIBR

© ALEKSEY DANICHEV / RIA NOVOSTI

of Eight financial body. The Russian Federation has never had a female prime minister or president, but it’s not out of the question, according to Kryshtanovskaya, who projects that Valentina Matvienko may be a contender. The former governor of Russia’s “second capital”, St Petersburg, Matvienko now chairs the Federation Council – the upper house of the Russian Parliament. This makes her the third highest-ranking politician in the country after Putin and Prime Minister Dmitry Medvedev. But the body she leads has only 12 other female members out of 163. The situation seems to reflect Russian society’s present views on women’s participation in politics. According to a 2011 poll carried out by the All-Russian Centre for the Study of Public Opinion (VTsIOM), 14 per cent of respondents believed that Russia had too many female politicians, 37 per cent thought their number should be increased, while 33 per cent believed that the number should remain the same. Half of the respondents supported the idea of quotas for women politicians, and only 5 per cent strongly opposed it. The public opinion divide over women politicians reflects the conservative, patriarchal outlook of society, which remains dominated by traditional views of the roles of men and women. Russia has no prominent political parties that make women’s rights a part of their platform. Following the collapse of the Soviet Union, the Women of Russia Party emerged, and initially had some electoral success. It won 8.1 per cent of the vote and 23 seats in the 1993 elections. However, the party is no longer a force in Russian politics. Last year, the Justice Ministry

YAROSLAVA KIRYUKHINA

AP

President of Russia

“A woman, regardless of her status or qualities, will always be subject to mistrust. For 13 years, I spent 70 per cent of my time and energy proving that I’m a politician with equal rights to men; I only had 30 per cent left to actually pass laws.”

Play on, superhero Putin battles zombies A Belgian programmer develops a new mobile game, which cashes in on Putin’s macho image KRISTEN BLYTH The Moscow news

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roving horde of the living dead – followers of an evil cult headed by Russian mystic Rasputin – attack a press conference and target President Vladimir Putin for termination. With the help of an American sidekick, alcoholic and aggressive American tough-guy Mike, the Russian politician battles an infinite host of zombies with wit, style – and a pen. Putin plays the superhero in a new mobile phone game, “You Don’t Mess With Putin,” due to be released around Halloween this year. The role is perfect for the steely Russian president, the game’s developer, Belgian programmer Michele Rocco Smeets, told RIA Novosti. “Putin has this tough guy image and he’s not afraid to get his hands dirty,” Smeets said. “He hunts, he rides, he shoots. A leader should be strong, and in my opinion Putin is the only world leader that really fulfills this image.” Putin also fights for the light in the battle against darkness in a Russian comic strip series, said Smeets. He, however, pointed out that the game doesn’t reflect any serious political views. “I’m not supporting socialism – I

RBTH for iPad®

just like the guy [Putin], as a person and as a leader.” In the game, Putin holds a press conference to demand the Westernisation of Russia’s video game industry. An army of zombies attacks the meeting and kills everyone but the president and an American video game expert, Mike, who’s the second character if gamers choose to fight the undead in two-player mode. The game’s dialogue is full of one-liners based on things the Russian president has said in real life, Smeets explained. After Putin stabs a zombie with a blunt writing instrument, he says, “Give me back my pen!” – an echo of the leader’s similarly blunt dressingdown of oligarch Oleg Deripaska in 2009, when Putin visited Pikalyovo and famously tossed a pen over to billionaire factory owner Deripaska and ordered him to sign an agreement to restart the plant’s activities, before reminding the tycoon to return the pen to him. Putin had a cameo appearance in Smeets’s last mobile game “Run Snowden Run,” where gamers playing fugitive former US security contractor Edward Snowden collect USB sticks and laptops while avoiding National Security Agent Jake.

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For each Gazprom there is a new startup.

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For each bottle of vodka there is a glass of kvas. For each of you there is a Russia of your choice. www.indrus.in


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