The present Bangladesh Government is riding high on the crest of glory of initiating a nuclear power plant during its tenure. A government spokesman declared after the signing of the deal between the Bangladesh Government and Rosatom, the Russian State-owned reactor vendor, in November 2011 that Bangladesh is on the verge of technological breakthrough. Mr Yeafesh Osman, State Minister for Science and ICT and head of technical committee on Rooppur Nuclear Power Plant, said over a year ago that the setting up of a nuclear power plant will improve Bangladesh's image abroad.
The questions are: Does borrowing money from a lender (Russian Government) and asking them to setup a plant and train local people constitute a technological breakthrough? Does the country need a nuclear power plant on borrowed money to create a better image abroad? A nuclear power plant, or for that matter, any power plant is setup anywhere in the world to produce power to meet energy demand, not to create an improved image abroad or assert advancement in technology, as claimed by the Bangladeshi Government. The whole exercise seems to be a brazen attempt to rake up bloated national pride by resorting to blatant misinformation and mendacious presumption.
Now let us see what this euphoria is all about. The Bangladesh Government under Sheikh Hasina's premiership had signed a Memorandum of Understanding (MoU) in 2009 and then a deal was signed with the Russian Government in 2011 to setup a nuclear power plant in Rooppur, Pabna on the banks of River Padma. The site was earmarked back in 1961 by the then Pakistani Military Junta under Field Marshal Mohammad Ayub Khan to have a 10 MWe prototype nuclear power plant. At that time no site selection was carried out, no environmental impact assessment was conducted and no economic feasibility study was made. In other words, it was just a blue sky proposal to assuage East Pakistani grievances of economic neglect.
Now the present government has dusted out that ill-conceived plan and wants to setup a 1000 MWe nuclear power plant (100 times bigger than the original plan) on the same site. But their madness does not stop there. They want not just one but two plants on the same site! Since that original proposal date in 1961, India had built the Farakka Barrage, just 40 km upstream on the same River, in the 1970s which withdraws as much as 75 per cent of water flowing down the River during the lean summer months (January to June) leaving only a trickle, which is insufficient for even normal riverine trade and transport. The local people say that the River is just dying. The remaining water available during the summer months is totally inadequate to supply cooling water for even one 1000 MWe plant, let alone two plants. It seems that this proposed plant has all the hallmark of a Fukushima disaster written all over it right from the beginning.
Now let us look at the financial side. The Bangladesh Government claims that Russia will build this VVER-1000 for $2,000. But the Russian Government or the vendor, Rosatom had never said anything to that effect. The only statement Rosatom had put forward was that Russia had agreed to provide $500 million loan to finance the initial stages of the project, such as the feasibility study, the construction of an exhibition centre, training of local people etc. When $500 million is taken out of $2,000 million, it leaves only $1,500 for the construction of the plant. This is so ridiculously inadequate that no sensible nuclear engineer would even consider it remotely possible. To give an example, the same type of the plant (VVER-1000) is costing $4,500 million in China to construct with cheap Chinese labour and locally available technology. How on earth the Bangladesh Government is going to set up this plant at third of the Chinese cost with imported manpower, technology and materials? It seems the Bangladesh Government is either deliberately misleading the public, or indulging on wishful thinking or just hallucinating!
Let us now go beyond the stage of loan procurement to the debt servicing. Even assuming that by some miracle the plant is built at the total cost of $2,000 million; the loan comprising the capital and interest will have to be paid back to the Russians. One must realise that whether the plant operates or not, whether the plant suffers an accident and consequently shuts down or not, the loan has to be paid back.
What is the loan amount? The Bangladesh Government is extremely reticent to give any concrete figure on the loan interest. However, it has been collected from various relevant documents that the interest rate will be LIBOR (London Inter-Bank Offered Rate) + 1 per cent. At the moment the LIBOR rate is only 1 per cent (which is the lowest rate in over 300 years because of the world recession). So the interest rate at the moment is 2 per cent. The first tranche of $500 million will require payment of Tk 70 crore per year on interest alone. Assuming that the feasibility study allows the project to go ahead and Bangladesh draws the remaining $1,500 in year 6, the interest payment will be Tk 280 crore per year. If the LIBOR rate goes up in a few years' time, which is most likely to be the case, to say 3 per cent, the total interest rate for Bangladesh will be 4 per cent resulting in interest amount of Tk 560 crore per year. Notice that it is only the amount to service interest. When the interest and capital is bundled together, Bangladesh Government will be required to pay, on the average, Tk 1,400 crore per year for the next 30 years! This payment is not contingent upon plant availability; it is simply the national debt to be serviced. Even if there is an accident causing destruction of the plant (like in Fukushima) or contamination of hundreds of square miles of arable land requiring relocation of millions of people costing billions of Taka, the loan will have to be paid back (unless Russia writes it off out of goodness of its heart!).
So this is the financial risk Bangladesh Government is undertaking with the most optimistic scenario of $2,000 construction cost. If the Chinese construction cost of $4,500 million is taken as realistic figure, the loan repayment for Bangladesh would come to Tk 4,200 crore per year. One must realise that in Bangladesh most of the technical manpower as well as skilled labour force will have to be imported (unlike in China) and that will have major cost implication. On top of that, all materials – high grade quality assured stainless steel, piping, valves, pumps, electric cables, electronic equipment, etc. will have to be imported. When all of these are taken into account the cost of $4,500 million may look very much an optimistic figure!
Last, but not the least, one must not overlook the decommissioning cost including the disposal cost of radioactive material and radioactive waste. As a rough guide, this back end cost is about the same as the construction cost. In other words, when the plant ceases operation (hopefully without any problem up to the end of its design life), there will be a cost burden of $4,500 million + inflation increase over the life span of the plant. At that time there will be no revenue accruing from the plant, but the cost of Tk 1,400 (Net Present Value) will continue for another 30 or more years.
The Government of Bangladesh must take all of these cost factors into account. They must be brought to book if they fail to do so. Walking blindly, purely on fascination and political exigency, is no excuse. Nobody, no political party has the right to mortgage the nation's future and endanger its very survival.
In this opinion piece, safety and security issues, environmental factors, storage and transportation of irradiated fuel and radioactive waste had not been addressed. These issues will be addressed in future.
A. Rahman is a Nuclear Safety Specialist.