India becomes latest to worry about nuclear

Manmohan SinghIn the immediate aftermath of the Japanese quake and beginning of the nuclear crisis, we wrote that the responses of the China and India, which are both planning major investment into new nuclear plants, was much more pro-nuclear than that of Western governments.

But now both have changed position. China performed a near U-turn on Wednesday when it abruptly announced a freeze on approvals for planned plants. Two days later, India has similarly changed tack, although in a less dramatic manner, by calling a for a review of the country’s nuclear safety rules.

Prime minister Manmohan Singh said:

The tragic nuclear incidents in Japan in the aftermath of the recent earthquake and tsunami should make us revisit strategies for nuclear safety, learning lessons from these experiences.

Unlike in China, however, this announcement seems designed to assuage public hostility towards nuclear, which was high even before the Japan disaster. There is no indication that approvals will be halted, or even that safety laws are likely to change.

As with the aftermath of the Chinese announcement, shares in Areva, one of the biggest foreign players in both countries, have not been affected.

When we previously wrote about the lack of movement in such companies’ share price, we suggested that investors may think that the Chinese announcement was little more than empty rhetoric. Well here’s another suggestion from a reader that is worth flagging up:

It could be on speculation that these companies will get a lot of future work associated with cleaning up the plants.

Also, perhaps it is on the realization that Areva’s Japanese competitors will not be able to compete with Areva as well in the future. Many of the plant construction contracts are written with large cancellation fees, so that Areva might do well either way, at least in the short term.

Thanks to exnuclearpowerplantdesigner for those suggestions.

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