The Business Aspect of the deal:
The ambitious nuclear energy plans of India represent a $ 175 billion market and the companies dealing in Nuclear commerce would want their pie in this business. India has an ambitious target of generating 20, 000 Megawatts of nuclear power by the year 2020.
India’s Ambitious Nuclear Energy Plans:
The current share of nuclear energy in the total generation in India is about 2.4%. The present (March 2010) installed nuclear power capacity of 4340 MW is expected to reach 7280 MW by March 2012 with the progressive completion of projects under construction. In 2010 only, India’s installed nuclear power generation capacity is expected to increase to 6,000 MW.
Dalberg Analysis:
Here comes into scene a developmental economic advising firm Dalberg. It had done an analysis about India nuclear power development. The Dalberg analyzed that for the next 20 years investments in nuclear energy in India likely to be far less valuable economically or environmentally than a variety of other measures to increase electricity production in India. The firm says
” While nuclear generation will contribute significantly after 2050, its contribution will remain marginal through 2016 and 2032. Even optimistic scenarios for the development of nuclear power in India, which is based on unproven thorium technologies, suggest nuclear would contribute only 9% of total generation capacity by 2032. Economic growth targets could be attained without significant increases in nuclear generation capacity and nuclear capacity will do little to reduce India’s reliance on foreign sources of oil and gas. Furthermore, given the dominance of coal in all of the electricity supply scenarios through 2032, clean coal technologies, demand side management, and renewable energy would have a greater impact on reducing carbon emissions than substitution based solely on nuclear energy. Although the development of nuclear energy today could aid in the eventual exploitation of India’s full nuclear potential required after 2050, it does not meet India’s energy needs as expressed by proponents of the U.S.-India Civil Nuclear Cooperation Initiative.” Link
Further the company says that U.S. nuclear vendors cannot sell any reactors to India unless and until India caps third party liabilities or establishes a credible liability pool to protect U.S. firms from being sued in the case of an accident or a terrorist act of sabotage against nuclear plants. The Report says:
“India also lacks “insurance liability against accidents, the provision of which would increase the per kWh costs, and the high costs of eventual decommissioning of nuclear reactors is often ignored. Finally, India is pursuing unproven nuclear technologies which could increase the cost to both build and run nuclear power plants. “
Understanding the Bill:
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To faciliate the nuclear commerce and attract United State Private Companies, Civil Liability for Nuclear Damage Bill also known as Nuclear Liability Bill was required to be passed.
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This Nuclear Liability Bill defines the financial and legal liabilities upon the involved parties viz. manufacturers, operators and government in case a nuclear accident occurs. The suppliers are US coompanies, Operator is Nuclear Power Corporation of India and Government is Indian Government. Some of these companies are General Electric and Westinghous.
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The Draft Bill was prepared by the UPA government and was approved by the cabinet on November 19, 2009. It was supposed to be tabled in the parliament in March 2010. However the bill was deferred by the Government.
Financial Liabilities:
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The bill deals with liabilities in case of an accident. However the bill is to be passed to activate Indo-US Civil Nuclear Agreeemnt.
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Besides, India’s ambitious and indigenous nuclear power program to achieve the goal of 20,000 MWe electricity produced through nuclear energy by 2020 and even a bigger target of 60,000 MWe by 2032, India needs involvement of foreign private business in manufacturing and supply of nuclear reactors. Once the bill is passed India becomes a member of international convention on liability in the civil nuclear arena.
What is Absurd in the Bill ?
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The clause 6 of the bill deals with the maximum financial liability in case a nuclear accident occurs in nuclear reactors. The maximum Financial Liability is the rupee equivalent of 300 million special drawing rights (SDRs). This amount is equivalent to approximately USD 458 million and in Indian Currency Rs. 2,087 crore.
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Opposition and other organizations that resist to this bill say that this amount is considerably meagre comparison to the destruction caused by a nuclear accident.
In United States 1957 version of the Price-Anderson Act — the world’s first comprehensive nuclear liability law — prescribed the operator’s liability at $60 million and the government’s share of liability at $500 million. This act has undergone several amendments over the period of the time and presently absolves the State from any liability below $10.761 billion in cover and places the onus entirely on the operator, without any cost to public or government and without fault needing to be proven.
Ultimate Burden on Indian Public:
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There is an absurd clause 7 in the bill which deals with the liability of each group.
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Clause 7 says that the operator will have to pay Rs. 500 crore and the remaining amount will be paid by the Indian government.
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Since the Operator is Nuclear Power Corporation of India Ltd. (NPCIL) and it is owned by the Government Itself.
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The clause further says that the operator can claim the liabilities form the manufacturer and supplier if it is mentioned in the contract.
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However, the maximum amount payable by the suppliers who are the foreign companies will be a very less amount.
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So ultimately the bill lays almost all the burden to Indian Public, who will pay ultimately even if a mistake is committed by the foreign companies.
Further, there are clause 17, 18 & 35 , which not only seem to be absurd but also seem trussing the Indian counterparts. Clause 17 says that only operator can sue the manufacturers and suppliers in case of any mishap. The bill does not suggest anything for the victims of the mishap. The vicitims can’t sue anyone. Clause 18 says that claims can’t be made after 10 years of a mishap. This is less time as compared to the effects of the accident. Clause 35 says that the Civil Courts of the country will not have authority to trial the responsible groups. It suggests India to be divided into zones , establishment of Nuclear Damage Claims Commissions in each zones.
Conclusion:
Since it provides for just a paltry compensation in the event of an accident, compared with similar laws in the US, EU and Canada , India’s Nuclear Liability Bill has run into trouble.
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