India ratifies global pact on accident liability
Westinghouse Electric, one of the world’s largest suppliers to nuclear utilities promptly welcomed India’s ratification of a global convention on accident liability in this field late Thursday saying it would help unlock the market potential in the country. However, doubts persisted if more diversified firms like General Electric (GE) would be enthused by New Delhi’s latest move, given that it is still reluctant to change the Civil Liability for Nuclear Damages Act (CLND), 2010, that makes suppliers — and not just plant operators — potentially liable for mishaps.
India’s endorsement of the Convention of Supplementary Compensation for Nuclear Damage (CSC) comes exactly a year after the ministry of external affairs clarified that the CNLD would be read to mean that supplier’s liability won’t necessarily be part of the relevant contracts and the immediate liability would lie with the operators. To allay the concerns of global nuclear suppliers, the government had also capped an insurance pool with a liability cap of R1,500 crore ($225 million) to cover suppliers’ risk of potential liability. The ministry’s clarifications were an outcome of an understanding reached between Prime Minister Narendra Modi and US President Barack Obama in January last year.
India has always maintained that its liability law is consistent with the CSC, which seeks to establish a uniform global legal regime for the compensation of victims in the event of a nuclear accident. According to independent strategic analyst Ajey Lele, “As such we (India) had no problems to do business with Russia and France. Now with this rectification, the US route is also getting clear.”
Rajeswari Pillai Rajagopalan, senior fellow and head, nuclear and space policy initiative, Observer Research Foundation, said, “India’s ratification of the CSC in effect means we are bound by the international liability regime. So even as there are differences between the Indian and the international liability regime, the effort is to dilute the differences and convince the global suppliers that India is ready to do business without putting them in jeopardy on the liability front.”
India’s nuclear market is pegged at $150 billion. Although many leading suppliers — US-based GE and Westinghouse, and France’s Areva, apart from Russian firms — are eyeing this huge market and even chalked out plans to build reactors in many locations in the country, they have been wary of the potential liabilities under the CNLD.
New Delhi, which has a plan to augment nuclear power capacity from 5,780 MW (3% of the country’s total installed power capacity from all sources) to 9,580 MW by 2019 and further to 14,600 MW by 2014 and 63,000 MW by 2032. It is envisioned that 25% of power production would be from nuclear sources by 2050.
“Ratifying the CSC is a step in the right direction towards unlocking the market potential for further nuclear development in India,” Jeff Benjamin, senior vice-president of new plants and major projects at Westinghouse, told Bloomberg.
Westinghouse Electric expects to reach a deal with India by the end of this year to provide at least six nuclear reactors, chief executive officer Daniel Roderick said in December. France’s Areva signed an accord in 2009 to build six 1,650-megawatt reactors at Jaitapur, Maharashtra.
The CSC will take effect on May 4 and “marks a conclusive step in the addressing of issues related to civil nuclear liability in India”, the external affairs ministry said in a statement after the document was handed to the International Atomic Energy Agency in Vienna.