Nuclear power for India! Stalled reactor project to get back on track ahead of US President Donald Trump’s visit

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January 29, 2020 8:50 AM

India has planned to triple its nuclear capacity by 2024 in an effort to give up the fossil fuels.

Nuclear power, Donald Trump, narendra modi, US nuclear power plants, nuclear reactors, Vijay Gokhale, India US defence ties, US-India civil nuclear agreementIf and when the contract between India and the US becomes active it is expected to give a big push to the country’s $150-billion nuclear power programme. (IE photo)

Ahead of the forthcoming visit of the US President Donald Trump next month, top officials of both sides are having several rounds of talks in an effort to resolve issues related to the six US nuclear power plants in India. For over a decade officials from both sides have had several rounds of commercial as well as technology-related negotiations for the US company to build six nuclear reactors. India has planned to triple its nuclear capacity by 2024 in an effort to give up the fossil fuels. If and when the contract between India and the US becomes active it is expected to give a big push to the country’s $150-billion nuclear power programme. Though the dates of President Trump’s visit have not been officially announced, it is expected that the visit will be in the second half of February.

Last year at the end of talks between Foreign Secretary Vijay Gokhale and Andrea Thompson, US undersecretary of state for arms control and international security, both sides agreed to strengthen security and civil nuclear cooperation. And to building six US nuclear power plants in India. The issue of the stalled six nuclear plants had come up during the second round of India-US 2+2 Ministerial Dialogue last December.

Nuclear Operator Liability issue

It is related to the Indian liability rules under which the costs of an accident at the plant has to be shouldered by the operator and not the builder of the nuclear power station.

US-based Westinghouse has been negotiating to build reactors in India for more than a decade, however, as has been reported earlier by The Financial Express Newspaper, the project was stalled when the company had filed for bankruptcy in 2017.

The discussions between the two countries are about the Westinghouse’s building of six AP1000 reactors. Both countries in 2008 had signed a US-India civil nuclear agreement signed in 2008. This was followed by an agreement in 2016 for building the reactors.

India, in the meantime, according to sources had reached out to Japanese company Toshiba seeking help to resolve the issue of sale of nuclear reactors following the bankruptcy of its US-based Westinghouse Electric Company.

The techno-commercial negotiations of the deal are at an advanced stage and any further delay is expected to hit India’s target of tripling its nuclear-generating capacity in the next four years.

Progress so far

A site in Gujarat to build a nuclear power station with a total capacity of 2,500 MW has already been allotted.

As has been reported earlier, sites have been identified for GE plants in Andhra Pradesh with an initial capacity of 3,200 MW.

Negotiations are stuck with US’ Exim Bank for a loan of around $8-9 billion to part-fund the building of the reactors.

In the hope that the problems could be sorted fast, the two sides were negotiating the terms of the loan with Exim Bank.

In 2015 the two countries had unveiled an insurance plan for nuclear plants. The focus of the plan to shield equipment suppliers from liability in the event of an accident.

More about the Insurance Plan

Based on the information available an insurance pool of Rs 1,500-crore ($226.16 million) insurance pool is likely to be created with participation from the GIC Re and four state-owned general insurance companies. Even the Centre is likely to be pitching in.

This could be bought by the suppliers and they are likely to recoup the cost by charging more for their services. Or most likely the NPCIL could take out insurance on behalf of these companies.

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