N-Reactor sellers await Indian order

Three months after the nuclear liability rules came into existence, there is virtually no progress in concluding commercial agreements in the nuclear sector as the executive rules have now been challenged in the floor of the Parliament.

The Left parties have raised questions on certain provisions of the Civil Liability for Nuclear Damage Rules 2011 in the Parliamentary Committee on Sub-ordinate legislation which would now examine the rules. The rules were published in the official gazette on November 11, 2011.

“Till the House panel decides on liability rules, we cannot proceed with commercial contracts,” Rabi Grover, adviser to the department of atomic energy, told Deccan Herald here. Indian liability regime is tilted against the suppliers – both national and international – who are getting increasingly jittery on the economic viability of nuclear commerce with Nuclear Power Corporation of India Ltd.

Unlike the earlier practice when the NPCIL absolved the suppliers of their liability once the delivery met quality parameters, the new rules made suppliers liable for the entire life span of a nuclear reactor, which may be as long as 40-60 years.

Global practice

This is against the global practice as no operator is willing to accept the liability under the “Right of Recourse” 40 or 60 years after commissioning of a nuclear reactor.

“The main difference of the nuclear sector with that of Bhopal gas tragedy is Union Carbide was the operator in Bhopal. In no other industry supplier is hold responsible,” an official said, adding that in case of an aircraft accident, compensation was sought from the airlines and not from aircraft manufacturers.

Not on records

Even though DAE and NPCIL officials are not willing to come on records on what could be the way out of this imbroglio as the matter is pending before a House panel, they apprehend a stalemate in nuclear trade if the existing liability rules exist.

As India plans an ambitious growth in nuclear energy – 63000 MW by 2032 – DAE depends a lot on foreign and Indian supplier to meet its demand.

Silence prevails

Deccan Herald contacted two large Indian nuclear suppliers – Larsen and Tubro and Bharat Forge – seeking their views on the new liability regime and if there is any rethink on their ties with the NPCIL. Both preferred silence. One of the casualties for delay in implementing liability rules is the commercial pact between French major Areva and NPCIL for setting up the first two 1650 MW EPR reactors at Jaitapur.