Prospects and Limitations of Public-Private-Partnerships as a Means for

Technology Transfer: The Case of Nuclear Energy in India

Udoy M. Ghose

Assistant Professor
University of Potsdam, Faculty of Economics and Social Sciences
August-Bebel-Strasse 89, 14482 Potsdam, Germany
Phone: +49/331/977-4463 Fax: +49/331/977-4631 Email: ughose@uni-potsdam.de

1. Introduction

Decades ago India’s nuclear energy programme was initiated mainly through the public sector. Up-
to-date India has achieved high expertise in design, construction, operation and maintenance of
nuclear power plants. A great part of this expertise can be attributed to a policy based on self-
reliance. To acquire further nuclear expertise, private participation through public-private
partnerships (PPPs) could be an option. PPPs are considered to have various benefits for the public
sector, and the transfer of know-how and technology as well as the acquisition of innovative
capabilities from the private to the public partner are regarded to be some of these benefits. By
analysing India’s past policy and experience to build up its nuclear sector, this paper shows that the
limitations to gain further nuclear expertise through private participation outweigh the prospects.

Therefore, first of all the common theoretical arguments concerning public-private partnerships and
technology transfer are outlined. Then a closer look will be taken at the evolution of India’s nuclear
energy programme within an international context. As will be demonstrated on the basis of India’s
past experience with international cooperation, technology transfer in the nuclear field from abroad
was often disrupted due to international political disputes. For that reason it proved to be beneficial
for the nuclear programme of India, that the country indigenously developed an extensive part of its
nuclear expertise and technologies for nuclear power. By considering the public policy to develop
India’s indigenous nuclear expertise the prospects and limitations of PPPs as a means for
technology transfer are analysed. As will be shown from a domestic perspective, the transfer of
nuclear technology, e.g. in the form of medical applications, is directed from the public to the private
sector and not vice versa as PPP-theory suggests. Finally, the main results are summarized in the
conclusion.

1
2. Public-private-partnerships, innovation and transfer of technology

PPPs are considered to have various benefits for the government. Besides fiscal effects, such as
the minimization of on-budget government expenditures and/or the avoidance to increase current
debt levels, the public partner can reduce the overall risk of an undertaking by transferring some of
the risk to the private partner. Another major benefit for the government, which is contributed to
these partnerships, is the reduction of costs compared to sole public provision. The cost-superiority
argument of these partnerships derives from the point of view that private sector firms have superior
scale, scope or learning economies, because they are more specialised and have more experience
in the relevant business which provides them as well with a greater ability to innovate. In contrast,
governments are seen to be engaged in much more diverse activities and usually have less specific
expertise or experience with the relevant technology or activity. (Vining and Boardman 2006, 3-4).

As a result of undertaking a PPP project, governments can gain new skills, technology and
knowledge which can expand government expertise. (Li and Akintoye 2003, 9). By utilising
innovation, skills in asset design, construction techniques and operational practices from the private
sector, the government can create value-for-money, defined as the effective use of public funds on
a capital project (Grimsey and Lewis 2002, 109). The Australian Government, for example, states:
“The private sector’s ability to provide innovative solutions to procurement is often a crucial driver in
delivering net benefits to government.” (Australian Government 2006, 8). Therefore, when a PPP
project calls for innovative thinking and new approaches, most would turn to the private partner. (de
Bettignies and Ross 2004, 148). By finding new ways of achieving ‘output’ targets, as opposed to
meeting ‘input’ specifications, which normally form the basis of sole public procurement, PPPs can
bring innovation through the private partner. (Thomson 2005, 115). Additionally, the public sector
will be reformed through PPPs by gaining new commercial skills, freeing ideas from capital
constraints, and working with the latest technological know-how. (Grimsey and Lewis 2004, 222).

To summarize: The arguments mentioned above emphasize that PPPs lead to a technology
upgradation of the public sector and an increased innovative capability of joint undertakings through
the private partner. But, as will be shown in the following, the transfer of know-how and technology
on an international scale can often be disrupted due to political disputes.

3. The evolution of India’s nuclear energy programme within an international context

The beginning of India’s nuclear programme can be traced back to the year 1944. It was barely
sixteen months after Enrico Fermi achieved the feasibility of a self-sustaining nuclear chain reaction
in Chicago, when the Indian physicist Homi Jehangir Bhabha (1909-1966) proclaimed India’s

2
nuclear future with the words: “When nuclear energy has been successfully applied for power
production in, say, a couple of decades from now, India will not have to look abroad for its experts
but will find them ready at hand.” (DAE 2006a, vii). With this vision in mind, Bhabha proposed to the
Sir Dorabji Tata Trust to set up an institute to train nuclear scientist who would in turn do research
on nuclear physics. This resulted in the foundation of the Tata Institute of Fundamental Research
(TIFR) in 1945, with Bhabha as its director to initiate basic research in nuclear sciences. (Perkovich
2001, 16; Menon 2000, 66; DAE 2006a, vii; Gopalakrishnan 2002, 371; Kakodkar et al. 2000, 410).

Bhabha drew up the blue print of the nuclear energy programme in India and was very much
encouraged and strongly supported by the country’s first Prime Minister, Jawaharlal Nehru. (DAE
2006b, 3). Soon after independence the Atomic Energy Act was passed in 1948 under which the
Atomic Energy Commission (AEC) was constituted in the same year. In 1954 the Department of
Atomic Energy (DAE) was established under the AEC to serve for nuclear activities as the apex
executive agency of the government with the overall guidance of the AEC. Since then the DAE has
been responsible for all civilian and military nuclear activities in India. (Gopalakrishnan 2002, 371-
372).

Bhabha’s plan based on early geological surveys, which indicated vast deposits of thorium in the
monazite sands of Kerala. Bhabha had the vision that this could be harnessed for securing India’s
long-term energy needs. (DAE 2006b, 3). Out of the nuclear ores in India approximately 518,000
tonnes of thorium metal and 78,000 tonnes of uranium metal can be extracted. It is estimated that
about 420 gigawatt electric-years (GWe-yrs) of electricity can be produced, if the entire Indian
uranium resources are used in natural uranium-fuelled pressurized heavy water reactors (PHWRs).
If then used in fast breeder reactors (FBRs) the resulting depleted uranium and separated plutonium
from the PHWRs could generate an additional 54,000 GWe-yrs of electricity. Then, in the FBRs,
production of uranium-233 (U233) can be achieved as well and eventually, by transitioning to
generations of Th-U233 fuelled breeder reactors, an additional of 358,000 GWe-yrs of electricity can
be produced. (Gopalakrishnan 2002, 372).

Hence, in order to utilize thorium, Bhabha’s vision required the building of not only one but many
different types of reactors which would use a variety of nuclear fuels like natural uranium, plutonium
and U233. His plan involved many intermediate stages of advanced technologies for reprocessing
spent fuel and to convert thorium to U233 through FBRs, about which little was known at that time.
The production and fabrication of nuclear fuels for the different types of reactors required a complex
web of operations in prospecting and mining of uranium, thorium and other rare metals. Additionally,
special materials like heavy water, alloys of zirconium, beryllium, etc. were needed. Bhabha’s vision
also demanded high levels of expertise in the physical and chemical sciences, metallurgical
processes and many branches of engineering. (DAE 2006b, 3).
3
Bhabha presented his plan to the Conference on Development of Atomic Energy for Peaceful
Purposes which was held in New Delhi in November 1954. His plan had three stages. In the first
stage India would build natural uranium-fuelled reactors which would produce power and plutonium
as a by-product. In the second stage reactors should be built which would be fuelled with the
recycled plutonium from the first-stage reactors and thorium. The combined plutonium-thorium fuel
would then produce U233 as a by-product when fissioned in these second-stage reactors. In the
third stage this U233 would be the key element. In this stage India would construct breeder reactors
whose fuel would be composed of U233 and thorium. By “burning” this fuel, more U233 would be
produced than would be consumed through fission, thereby “breeding” the U233 fuel. (Perkovich
2001, 26).

To get started coping with nuclear reactor technology, India in 1955 set up its first research reactor,
called APSARA, based on British engineering drawings. The reactor went critical in 1956 with
enriched uranium fuel supplied by the United Kingdom. It is still in operation and is a light water-
moderated swimming pool unit of 1 megawatt-thermal (MWt) rating. According to Bhabha’s plan a
second research reactor was more important, which was built jointly by India and Canada through
an intergovernmental agreement under the Colombo Plan. This reactor called CIRUS is a heavy
water-moderated 40 MWt reactor and commenced operation in 1960, using heavy water supplied
by the USA. Parallel to the negotiations with Canada, Indian scientists were designing a plant for
recovering plutonium from the spent fuel in CIRUS. The construction of this indigenous
reprocessing plant began in 1961 and was commissioned in 1965. In later years India indigenously
designed and built a 100 MWt heavy water-moderated reactor called DHRUVA which was
commissioned in 1985. Both, CIRUS and DHRUVA, still continue to serve the Indian military
programme as major producers of weapons-grade plutonium, while at the same time producing
radioisotopes for medical and industrial purposes. (Gopalakrishnan 2002, 374; Perkovich 2001, 27).

The first nuclear power reactors, which commenced commercial operation, were the Tarapur Atomic
Power Stations (TAPS-1 and 2) bought from the U.S. company General Electric. Being boiling water
reactors (BWRs), they were an exception to Bhabha’s three stage nuclear power plan and assigned
to acquire experience in managing nuclear power station construction and operating nuclear power
units. The construction of these reactors started in 1964, and they were commissioned in 1969.
Originally, each BWR had 210 megawatts-electrical (MWe). They are still in operation, but in 1985
their power level had to be reduced to 160 MWe each, due to the inoperability of all their secondary
steam generators, in which extensive tube cracks had developed. (Gopalakrishnan 2002, 375;
Sebastian 2000, 401-402, Kakodkar et. al. 2000, 413; Kumar and Bhardwaj 2000, 422).

At about the same time, when Bhabha initiated negotiations with the USA for TAPS-1 and 2, he also
started discussions on nuclear power reactors with Canada. India had already benefited from the
4
Indo-Canadian cooperation on the CIRUS project in the area of heavy water reactor technology. As
heavy water reactors formed the first stage of Bhabha’ plan, India and Canada agreed in April 1964
to set up a 200 MWe PHWR power station in Rajasthan. While the design of the reactor and the
supply of all critical equipment were the responsibility of the Canadians, the construction and
commissioning of the plant were mainly done by the Indians under Canadian guidance. The
Rajasthan Atomic Power Station (RAPS-1) went into commercial operation in 1972 and afterwards
was left in charge of Indian engineers, who were trained in Canada on reactor operation and
maintenance. (Gopalakrishnan 2002, 375).

In December 1966 Canada and India agreed to set up a second similar reactor (RAPS-2) at the
same site as RAPS-1. Then, in May 1974, when India conducted a first underground nuclear
explosion as an attempt to test a nuclear weapon, Canada froze all assistance to India for the RAPS
nuclear units and eventually terminated all its nuclear cooperation in May 1976. India was left to
complete the RAPS-2 project on its own, as the supply of most of the crucial components and
equipment for this reactor was withheld by the Canadians since May 1974. The USA also reacted
strongly on India’s first nuclear weapons test. It withdrew from its obligation to supply enriched
uranium fuel for the TAPS reactors, and the U.S. government prohibited General Electric to export
the contracted spare parts to India and to provide any technical assistance for these reactors.
(Gopalakrishnan 2002, 375-376; Perkovich 2001, 178-187).

After the USA withdrew the fuel supply for TAPS, France took over the fuel supply for some time.
However, when in 1992 the Nuclear Suppliers Group (NSG) restrictions came into force, the French
stopped supplying nuclear fuels for TAPS. The NSG, which was formed by the USA, imposed
restrictions on an extensive list of items for nuclear use and countries receiving nuclear materials
had to agree to accept the safeguards of the International Atomic Energy Agency (IAEA). India was
unwilling to agree on the IAEA full-scope safeguards for all Indian nuclear facilities. As China was
not a member of the NSG it stepped in after the French supply stopped to assist India with the fuel
supply for TAPS. But after India launched a nuclear weapons test in May 1998, China indicated its
unwillingness to supply any further fuel. In 2001, despite strong objections from the USA, India
reached an agreement with Russia, under which the latter would guarantee the supply of enriched
uranium for TAPS. (Gopalakrishnan 2002, 376-377).

5
 Table 1: Nuclear Power Reactors in India 2008
)
A) Reactors in Capacity **
Date
operation (MWe)
)
Name Type* Location Net Gross Connected
KAIGA-1 PHWR KARNATAKA 202 220 Oct. 2000
KAIGA-2 PHWR KARNATAKA 202 220 Dec. 1999
KAIGA-3 PHWR KARNATAKA 202 220 April 2007
KAKRAPAR-1 PHWR GUJRAT 202 220 Nov. 1992
KAKRAPAR-2 PHWR GUJRAT 202 220 March 1995
MADRAS-1 PHWR TAMIL NADU 202 220 July 1983
MADRAS-2 PHWR TAMIL NADU 202 220 Sep. 1985
NARORA-1 PHWR UTTAR PRADESH 202 220 July 1989
NARORA-2 PHWR UTTAR PRADESH 202 220 Jan. 1992
RAJASTHAN-1 PHWR RAJASTHAN 90 100 Nov. 1972
RAJASTHAN-2 PHWR RAJASTHAN 187 200 Nov. 1980
RAJASTHAN-3 PHWR RAJASTHAN 202 220 March 2000
RAJASTHAN-4 PHWR RAJASTHAN 202 220 Nov. 2000
TARAPUR-1 BWR MAHARASTRA 150 160 April 1969
TARAPUR-2 BWR MAHARASTRA 150 160 May 1969
TARAPUR-3 PHWR MAHARASTRA 490 540 June 2006
TARAPUR-4 PHWR MAHARASTRA 490 540 June 2005
Sub-Total A: 3779 4120
B) Reactors under
construction
KAIGA-4 PHWR KARNATAKA 202 220 July 2008
KUDANKULAM-1 PWR TAMIL NADU 917 1000 Jan. 2009
KUDANKULAM-2 PWR TAMIL NADU 917 1000 July 2009
PFBR FBR TAMIL NADU 470 500 N/A
RAJASTHAN-5 PHWR RAJASTHAN 202 220 June 2008
RAJASTHAN-6 PHWR RAJASTHAN 202 220 Dec. 2008
Sub-Total B: 2910 3160
Total A+B: 7280
)
* PHWR = Pressurized Heavy Water Reactor, BWR = Boiling Water Reactor,
PWR = Pressurized Water Reactor, FBR = Fast Breeder Reactor.
)
** Capacity: Gross capacity (maximum output power of all generators) minus power
taken by station auxiliaries and the losses in the transformers that are considered integral
parts of the station = Net capacity.
Source: International Atomic Energy Agency (IAEA). Above data from Power Reactor
Information System (PRIS) database, (http://www.iaea.org/programmes/a2/index.html),
accessed on 19 November 2008. Capacity totals by author.

In 2002 India signed another contract with the Russian Federation for setting up two 1000 MWe
nuclear power stations at Kudankulam in Tamil Nadu. (DAE 2006c, 62). Accompanied by strong
protest of the USA, this agreement envisaged that Russia will supply the design and critical
equipment and guarantee the lifetime supply of enriched uranium fuel for these light-water
moderated pressurized water reactors (LWRs). India, through its DAE affiliate, the Nuclear Power
Corporation of India Limited (NPCIL), undertakes the construction and the commissioning of these
reactors under Russian supervision and subsequently takes charge of the plant operations. Being
LWRs these reactors are actually inconsistent with Bhabha’s plan which is based on PHWRs and
FBRs. The main goal of importing these reactors is to rapidly increase the installed nuclear capacity

6
of the country. (Gopalakrishnan 2002, 392-393). The past development of India’s installed nuclear
capacity is shown in Figure 1 and the present status can be seen in Table 1.

Figure 1: Installed Nuclear Plant Capacity (MWe)

3400

2900

1500

900

400

1970/71 1980/81 1990/91 2000/01 2005/06

Source: Ministry of Finance 2008, Table 1.24. A.

Although the development of the Indian nuclear programme was not solely achieved without foreign
assistance, India’s historical experience in building up this sector shows that the technology transfer
from international side was often disrupted, especially after India tested its first nuclear weapon.
Facing the obstructions from international sides it proved to be beneficial for the development of
India’s nuclear energy programme that the Government of India decided from the very beginning to
develop indigenous nuclear expertise. In this context it has to be remembered that when Bhabha
shaped his plan nuclear technology was in its infancy even in the developed world. (DAE 2006b, 3).
His plan involved technologies that were at that time in the distant horizon and it was proposed well
before the first commercial nuclear power reactor was built anywhere in the world. (Gopalakrishnan
2002, 372). As will be seen in the following the main think-tank for India’s nuclear expertise are
public sector R&D centres and training schools.

7
4. Developing indigenous expertise and technologies for nuclear power

Right from the beginning the development of India’s nuclear expertise was the task of the public
sector and began with the foundation of the country’s first research centre for basic research on
nuclear sciences, the TIFR, which was founded in 1945, as mentioned earlier. In later years the
research and development specific to nuclear energy was shifted to the Bhabha Atomic Research
Centre (BARC). At the time of its foundation this centre was called the Atomic Energy Establishment
at Trombay (AEET), which was established in 1957 as an R&D centre for nuclear sciences. The
centre was renamed into BARC in 1967 after the death of Bhabha. BARC has pioneered almost all
the research, development and demonstration activities needed for establishing the national PHWR
programme. The nuclear reactors APSARA, CIRUS and DHRUVA were all established at this
centre. Since its creation BARC has continuously expanded its activities and facilities and
consolidated its strengths in every subarea of the nuclear fuel cycle. (DAE 2006b, 7;
Gopalakrishnan 2002, 373-374; DAE 2006c, 3; Kakodkar et al. 2000, 410). By now PHWR
technology, which forms the first stage of India’s nuclear energy strategy, has reached a stage of
maturity. (DAE 2003, 1-4; DAE 2006c, 3; Sarma 2000, 437).

Besides R&D on nuclear activities, BARC is as well engaged in the training and education of junior
scientists for India’s nuclear energy programme. The centre established a training school in 1957 to
prepare a selected group of young scientists and engineers for responsible positions in various
institutions and projects of the DAE. Since then around 7,000 young scientists and engineers from
various disciplines have passed the school. They are contributing to all sections of the nuclear
programme. The aim of the training school is to produce individuals who combine a large number of
sciences and technologies that are demanded by any work in nuclear energy. Therefore, the
trainees in each of the disciplines are introduced to important features of other disciplines. The
training school employs no permanent teaching staff as all the nearly 300 teachers are working
senior scientists and technologists at BARC and associated institutions who at the same time
continue to practise their R&D work. In this way the teachers are able to demonstrate their own
research problems to the students and discuss their own immediate work experience in their fields
in the class rooms. (DAE 2005, 18).

For the second stage of India’s nuclear energy programme R&D activities are also being
undertaken in other parts of the country. This stage requires setting up FBRs backed by
reprocessing plants and plutonium-based fuel fabrication plants. FBRs can increase fuel utilisation
by about sixty times of what is possible with PHWRs. (DAE 2003, 2; DAE 2006c, 15; Sarma 2000,
437). To initiate a programme for developing the fast breeder technology the Reactor Research
Centre (RRC) was started at Kalpakkam in 1971 and was renamed as the Indira Gandhi Centre for
Atomic Research (IGCAR) in 1985. The centre has successfully designed, constructed and

8
operated a Fast Breeder Test Reactor (FBTR). (DAE 2006b, 9; Bhoje and Govindarajan 2000, 396).
According to the DAE, this reactor, which is operating with indigenously developed mixed uranium-
plutonium carbide fuels, has achieved its technology objectives. (DAE 2006c, 15). Based on
successful demonstrations of FBTR at IGCAR, the DAE decided to initiate action to design and
build a 500 MWe Fast Breeder Reactor. In 2003 the Government of India approved the construction
of this reactor at Kalpakkam. To construct and operate the reactor, which is based on the design
and technology developed by IGCAR, a new public sector corporation, named Bharatiya Nabhikiya
Vidyut Nigam Limited (BHAVINI), was formed. (DAE 2006b, 9-10; DAE 2006c 15). So far, India’s
FBR programme is in the technology demonstration stage at the present time. (DAE 2006c, 3).

The third stage of India’s nuclear energy programme will be based on the thorium-U233 cycle.
Uranium is obtained by irradiation of thorium in PHWRs and FBRs. At BARC an Advanced Heavy
Water Reactor (AHWR) is being developed to expedite transition to thorium based systems. As the
third stage of India’s nuclear programme envisages utilization of thorium on a large scale, the DAE
plans to lay a solid foundation for the use of thorium by developing appropriating technologies
during the next 20 years. First steps have already been made by introducing thorium, in a limited
way, in research reactors and PHWRs. The latest addition to the Indian nuclear programme is the
development of Accelerator Driven Sub-Critical Systems (ADS) for nuclear reactors for breeding
fissile U233 from thorium. The DAE has launched the development of proton injectors as a first step
towards realization of ADS. (DAE 2003, 2-4; DAE 2006c, 19; Sarma 2000, 437). Thus, the third
stage of India’s nuclear energy programme is so far in a technology development stage. (DAE
2006c, 3). Although this stage is still a long way from reaching maturity it gives India the opportunity
to become a world leader in mastering these technologies: “If India perseveres in these areas, it
may then end up as a pioneer in plutonium and thorium technologies… . India will then turn out to
be a global leader in these technologies. An embargoed nation, long denied its due, would rise to
become the global resource for these technologies.” (Bharadwaj, Tongia and Arunachalam 2006,
1210)

By now, India has achieved total self-reliance in design, construction, operation and maintenance of
nuclear power plants. The country has as well mastered fuel cycle technologies from mining to
fabrication of natural uranium fuel, fabrication of enriched uranium fuel, reprocessing technology,
fabrication of plutonium and thorium based fuel which is required for its future programme.
(Sebastian 2000, 402). To quote the DAE: “The Department of Atomic Energy (DAE) is an
organization incorporating research centres and closely linked industrial units... . This has enabled
the Department to plan and successfully execute a comprehensive programme in the area of
nuclear sciences involving the chain of activities viz. research, development, demonstration and
deployment of technologies. This approach has been a crucial factor in building a self-reliant
capability in all aspects of the nuclear fuel cycle. In the nuclear field we have to retain and
9
strengthen our ability to carry forward with further domestic developments of advanced
technologies, so as to remain immune from technology denial regimes and tailor our programme to
be in tune with our nuclear resource profile.” (DAE 2003, 1).

5. Prospects and limitations of technology transfer between the private and the public
sectors through PPPs in India’s nuclear energy sector

As mentioned previously, the Indian public sector was and is the main actor within India’s nuclear
energy programme, although the construction of India’s nuclear power plants was not done by the
DAE and its affiliated institutions alone. Other companies from the public and the private sectors
were involved as well in the implementation of India’s nuclear energy programme. For example,
equipment for the secondary system components did not fall in the category of nuclear equipment
and, therefore, was not affected by the post-1974 export restrictions for companies from abroad.
Hence, it was possible to manufacture a variety of power plant equipment through arrangements
with foreign collaborators. Some of the key primary system equipment for the PHWR stations, as
well as the fast breeder programme in later years, was designed and fabricated by the Indian
government-owned power sector manufacturer Bharat Heavy Electricals Limited (BHEL). A few of
the major Indian private sector manufacturing companies, such as Larsen & Toubro and Godrej
Industries, took on some responsibilities for supplies as well. (Gopalakrishnan 2002, 378).

The Indian private sector involvement shows that India’s nuclear energy programme was
implemented with the help of some sort of PPPs on a marginal scale. Marginal in the sense that
private participation of Indian companies was very limited and basically restricted to the supply of
equipment only. In contrast, India’s nuclear technology and know-how was and is developed by the
public sector. This is not surprising as from the very beginning India’s nuclear energy programme
was meant to be a Central Government monopoly by law. India’s first Atomic Energy Act of 1948 as
well as the later passed acts and amendments put strong emphasis on this (see, for example,
Government of India 1962 § 3 and § 14).

For the future the Government of India intends to increase the nuclear energy capacity of the
country significantly. By 2020 the DAE plans to have an installed nuclear generation capacity of
20,000 MWe. This will consist of a mix of PHWRs, FBRs and Advanced Light Water Reactors
(ALWRs). (DAE 2003, 4; NPCIL 2008, 48). To achieve this target the Central Government aims at a
stronger involvement of the private sector within the nuclear energy sector. In section 5.2.19 of the
“National Electricity Policy 2005” it is stated: “Nuclear power is an established source of energy to
meet base load demand. Nuclear power plants are being set up at locations away from coalmines.
Share of nuclear power in the overall capacity profile will need to be increased significantly.

10
Economics of generation and resultant tariff will be, among others, important considerations. Public
sector investments to create nuclear generation capacity will need to be stepped up. Private sector
partnership would also be facilitated to see that not only targets are achieved but exceeded.”
(Ministry of Power 2005; emphasis added by author).

As to a possible technology transfer from the private to the public sector, these partnerships at
present have only a limited scope, if Indian domestic private sector companies are addressed as a
partner. Contrary to e.g. Germany, where nuclear power plants are mainly run by private companies
which were in the past and are at present strongly involved in the development of nuclear expertise
(RWE 2008; EON 2008), the Indian private sector companies historically were not incorporated in
the development of this sophisticated technology. It is, therefore, very unlikely that at the moment
the Indian public sector can gain nuclear expertise from domestic private companies.

In fact, in the case of nuclear technology, the technology transfer is directed in the opposite
direction, namely from the public to the private sector as documented by the following quotations:
“In the process of developing nuclear technologies, the Department [of Atomic Energy; added by
author] has acquired expertise in a variety of advanced areas and these technologies have enriched
the hi-tech base in the country in several ways. Certain technologies have been transferred to other
private and government agencies as spin-offs... .“ (DAE 2003, 3). “The research carried out in DAE
research centres is generating several spin-off technologies that are transferred to industry for
commercial production. These centres also provide various technical services that are benefiting the
country. The recent ones transferred from BARC to industry are on-line domestic water purifier,
electrolysing of reactor channel sealing plug jaws, and improved lascan dia guage. … BARC has
also transferred the technology of the indigenously developed Cobalt-60 teletherapy unit to private
entrepreneurs for commercial production.” (DAE 2006c, 54). Besides, the general Indian public is as
well benefiting from the nuclear research done through the DAE: “In the field of diagnosis and
treatment, 26000 patients were examined for thyroid function alone, cintigraphic imaging studies
and treatment of thyrotoxicosis, thyroid cancer and bone metastasis in the Radiation Medicine
Centre.” (Mohan 2000, 433).

As the Indian private sector is, for the time being, not really a realistic option to gain further
sophisticated nuclear expertise for the public sector, international agreements for cooperation in
nuclear sciences seem to be more feasible. Figure 2 indicates that India’s future nuclear energy
capacity can grow much faster with international cooperation than without it. From this perspective
the agreement made on 1 August 2007 for cooperation on nuclear energy issues between the
governments of India and the U.S. could play a significant role. Article 2 of this agreement
emphasizes full civil nuclear cooperation between the signing parties. This cooperation includes

11
advanced nuclear energy research and development as well as technology transfer on an industrial
or commercial scale. (Government of India and Government of the U.S. 2007, Article 2).

Figure 2: Intended Nuclear Capacity Build-Up (MWe)

23180
19780
14380

13180
12680

11780
10380
9280

8680
7280
7280

7280
7280

7280
7280

7280
5780
5780
4560
4560
9

8
/0

/1

/1

/1

/1

/1

/1

/1

/1

/1
08

09

10

11

12

13

14

15

16

17
20

20

20

20

20

20

20

20

20

20
With international cooperation Without international cooperation

Source: NPCIL 2008, 49.)

The Indo-U.S. nuclear deal, which offers India the opportunity to get out of international nuclear
isolation, allows U.S. and other nations’ companies to export to India investment, technology and
fuel for the establishment of nuclear reactors for civilian purposes. (Ghosh 2007, 3823). For the
companies this means a great business opportunity. According to the U.S.-India Business Council
(USIBC) this agreement has a projected potential of US-$ 150 billion worth of business for U.S. and
Indian companies over the next 30 years, if India keeps on implementing its planned nuclear energy
expansion. (Mint 2008). The agreement will also help to release the Europeans (especially France),
Japan and Russia from the constraints which prevent them from entering into intensive trade and
investments involving nuclear technology with India. (Ghosh 2007, 3823).

Nevertheless, political relations between countries are not constant, they usually tend to change
over time, even if (or maybe because?) democratic countries are involved: “However, the noblest of
intentions on international cooperation often meet with intractable resistance in the thrust and parry
of domestic policy in a democracy.” (Kanwal 2005, 2). India’s past experience with international
cooperation on nuclear issues is a proof for that type of change in international policy. The three-
stage nuclear energy strategy of India will take decades from now to be fully implemented and to be

12
matured. No one knows at present whether during that time there will be an unhampered flow of
foreign technology or whether international circumstances will generate again a denial of
international nuclear technology transfer which India experienced in the time after its first nuclear
bomb test. Therefore: “For a large country like India, it is considered strategically important to
develop core capabilities in critical areas to reduce vulnerabilities to external pressures. Incidentally,
technology denial regimes have been operational through a major part of the DAE’s history.”
(Kakodkar 2008, 2).

Given this uncertainty of an unobstructed international nuclear technology transfer in the future, it
remains compulsory for the Government of India to further develop its autonomous nuclear
expertise in the country. A necessity, which is also considered by the present Prime Minister of
India, Manmohan Singh: “The initiative to open civil nuclear trade with the international community
is a step towards accelerating the development of nuclear energy in the service of our country. …
The autonomy of our Research and Development activity, including development of our fast breeder
reactors and the thorium programme, in the nuclear field will remain unaffected. There will be no
interference in any scrutiny of our strategic programme.” (Singh 2008). International technology
transfer can be a help for this, as it is usually easier to imitate existing technologies than to innovate
completely new ones. But even adaptation of high-tech technologies, which is interconnected with
nuclear energy, requires a high level of domestic expertise. Due to a lack of experience of the
domestic private sector in the development of nuclear technologies in the past, India’s nuclear
public sector, headed through the DAE, remains the mastermind for this task.

In this context it is interesting to note that the level of nuclear expertise in the public sector is not
only high enough to adapt foreign technologies, but also has reached a level to provide technology
transfer to the international community: “India is a designated member of the Board of Governors of
the International Atomic Energy Agency (IAEA) since its inception. Besides taking active part in
policy management and programme of the Agency, India offers training facilities, fellowships,
scientific visits, etc. to foreign scientists and provides the services of its scientist for expert
assignment to other countries, both through IAEA and to the countries with which we have entered
into bilateral agreements for co-operation in the field of peaceful uses of atomic energy.” (DAE
2006c, 55). In fact, not only India will be profiting from the international nuclear technology transfer,
but also other countries might benefit from India’s nuclear knowledge. In the words of Prime Minister
Singh: “We should use the opportunities offered by international cooperation to accelerate our R&D
programme. In the area of nuclear science and engineering, development in India has been taking
place in isolation. Many innovations developed by our scientists may not have any parallels in other
countries. Therefore, we can make an intellectual contribution to the global scientific community,
benefiting ourselves from such exchanges.” (Singh 2008). Whether this technology transfer is

13
directed from the Indian public sector to the foreign private or public sector simply depends on the
type of ownership of the institutions and companies the foreign scientist are working for.

6. Conclusion

The transfer of nuclear technology from the public to the domestic private sector demonstrates that
the transfer of know-how and technology can successfully be accomplished from the public to the
private sector. This, however, cannot be understood as a falsification of the PPP-theory argument
that the public sector can acquire technology and innovation capabilities from the private sector
through PPPs. Industrial sectors which are vital for economic development are very heterogeneous,
and it depends on the individual circumstances whether the private party will learn from the public
party or vice versa. But the argument that a PPP transfers expertise and technology solely from the
private to the public sector has to be rejected bearing in mind the Indian experience of nuclear
energy development.

Taking into account India’s historical experience with international nuclear technology cooperation,
which often was disrupted by international political disagreements, it is vital for India to develop its
nuclear expertise further on a strong indigenous base to ensure that the nuclear energy programme
is implemented unhampered in future.

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