Pact between NPCIL, Westinghouse for plant in Gujarat, in the offing.
By Rajiv Theodore
NEW DELHI: One of the key deals that India and the United States hope to finalize when Prime Minister Manmohan Singh meets President Barack Obama over a working lunch at the White House on Friday, September 27th would be to take the nuclear deal signed in 2008 between the two countries to the next level. More specifically, an agreement between the Nuclear Power Corporation of India Limited (NPCIL) and US energy major Westinghouse for setting up an atomic power plant in Gujarat is in the offing.
As a prelude to the visit, talks are already on between these two companies. The proposed deal between Toshiba-owned Westinghouse and NPCIL would be the first time money is committed to a commercial US nuclear supplier since a civil nuclear pact was inked during the tenure of US President George W Bush.
So keen are the two countries to strike the deal that there are reports that Washington has exempted India from its domestic laws which bar nuclear trade with countries outside the Non-Proliferation Treaty (NPT). Under the proposed deal, India would contract Toshiba’s US nuclear unit Westinghouse for preliminary works, including information sharing to build nuclear plants in Gujarat the value of which is yet to be revealed.
If the deal clicks India’s nuclear capacity would touch 63,000 megawatts in the next 20 years by adding nearly 20 reactors from a current crop of 20 reactors at a capacity of 4,780 MW.
Critics say that India is changing the Civil Liability for Nuclear Damage Act to serve the interests of US suppliers like Westinghouse. Current laws in the field say that in the event of a nuclear accident, the operator will pay for the immediate damages—which in this case is the government-owned Nuclear Power Corporation of India Limited (NPCIL). This will be what is called a ‘no faults’ compensation which means that it doesn’t matter whose fault it is, NPCIL will pay Rs. 1,500 crore immediately and if more is needed, the government will pay up.
The question is what happens after this. Surely, NPCIL should, the argument goes, be allowed to claim damages from the supplier? Under the Rules of the Act, this recourse is to be limited to the initial period of the license which is five years or the life of the product liability offered by the supplier in case that is longer.
While many argue that this is tantamount to allowing nuclear plant suppliers to go scot free in case their defective plants caused the accident, how can a supplier be held responsible for the damage if the plant is being run by NPCIL? If NPCIL doesn’t observe some safety standards, or the atomic energy regulator doesn’t enforce this, how is the supplier to be held responsible? Indeed, the international practice is that nuclear plant operators bear the responsibility, not suppliers. Even in the US where product liability laws are very stringent proving an accident because of faulty equipment and not the faulty use of the equipment becomes a gargantuan task.
Although it is hard to think of a single incident when India has been sold out to the Americans, there exists a sell-out mentality in India, especially in the political circles when it comes to dealing with the United States. Perhaps the ghosts of the Bhopal gas leak tragedy of 1984 involving the Union Carbide still comes in handy for the opposition parties to batter the government for diluting the liabilities clause relating to suppliers’ deficiencies.
The government has since clarified that the law of the land cannot be violated.
“Any company, whether foreign or domestic, has to follow procedures that are consistent with Indian laws. All contracts have to be consistent with Indian laws,” Sujatha Singh, India’s foreign secretary says.
It is on this account that the US companies had so far not come forward to sell nuclear reactors to India for power generation. In 2005 it may be recalled that  it was the persistent effort by Washington that helped India obtain the necessary international waivers, enabling it to engage in nuclear commerce when it has not signed the nuclear non-proliferation treaty. The other foreign players in the Indian nuclear energy circuit Russia and France too have issues with India’s liability laws but they have not allowed this to come in the way of commencing work here.
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