China firms join controversial Pakistan nuclear push

(Reuters) - Chinese companies this month quietly signed a contract to cooperate in building two nuclear reactors at Pakistan's Chashma atomic complex, advancing a controversial project that has worried Washington and India.

The China Nuclear Industry Fifth Construction Company and the CNNC China Zhongyuan Engineering Corp, which specialises in foreign nuclear projects, agreed to work together on the third and fourth plants at the Chashma complex, according to a Chinese-language announcement on the website of the Construction Company (www.cnfc.net.cn).

The deal, signed in Shanghai on June 8, confirmed that long-running plans about Chinese help in expanding Chashma are moving forward, despite misgivings in the region and beyond about security and proliferation risks in troubled Pakistan.

A Pakistani government official said there was nothing new in the agreement and that it was part of an ongoing cooperation with China in the peaceful use of nuclear energy.

"China has long been cooperating with Pakistan for the use of nuclear technology for peaceful purposes and this cooperation is continuing," the official said.

The pressurized water reactors are "a major cooperative project between China and Pakistan that both governments treat as highly important," said the company announcement dated the same day as the signing, which received almost no domestic media attention at the time.

The project will "bring Chinese nuclear energy to the world and is significant for once again bearing firm fruit for Sino-Pakistani friendship," said the company.

It did not give any details about the timing and cost of the project. The companies have worked on earlier reactors at Chashma.

Mounting signs that China will proceed with the reactor project in Punjab province have stirred international misgivings, especially in neighbouring India and the United States.

The United States said this month it wanted clarification from China on the proposed plants, which have been under planning and deepening negotiation for years.


NUCLEAR SUPPLIERS GROUP

Pakistan and India are wary rivals, and both possess nuclear weapons and stay outside the nuclear Non-Proliferation Treaty. Islamabad has looked to Beijing to counter to Indian influence.

Pakistan also faces severe power shortages. China says its nuclear cooperation with Pakistan is purely peaceful and follows international safeguards.

The proposed nuclear deal may be discussed this week by the Nuclear Suppliers Group, a body of 46 governments that seek to control access to their nuclear fuel and reactor technology to prevent the spread of atomic weapons.

China and the United States are among the NSG members, who will meet in New Zealand.

In 2008, China allowed a nuclear energy agreement between Washington and Delhi to win NSG approval, despite misgivings in Beijing, long a rival of India, and criticism from other capitals that the deal eroded nuclear non-proliferation rules.

China has said that the two proposed reactors "form part of an earlier agreement with Pakistan that predated its NSG membership, thereby denying that the sale would violate NSG guidelines," said Lora Saalman, an associate in Beijing with the Carnegie Endowment for International Peace, who studies nuclear diplomacy between China and India.