Govt draws flak for easing N-damage Act

The Centre on Thursday drew flak from the Opposition for trying to dilute a key provision in the Civil Liability for Nuclear Damage Act and bypass the Atomic Energy Commission (AEC) to clinch a deal with a US nuclear company.

The development comes weeks before Prime Minister Manmohan Singh’s visit to the US.
A note, purportedly prepared for consideration of the Cabinet Committee on Security (CCS), revealed that some people in the government wanted to bypass the AEC to get an approval for a preliminary agreement between Nuclear Power Corporation of India Limited (NPCIL) and Westinghouse Electric Company LLC, for a proposed atomic power plant in Gujarat.

It also disclosed that the Centre sought to go ahead with the deal even as viability analysis of the project is yet to be completed.

The “Early Works Agreement” between Westinghouse and NPCIL is going to be the first move towards commercial implementation of the India-US civil nuclear cooperation deal, which was inked five years ago. The Centre was keen to conclude the NPCIL-Westinghouse agreement before Singh meets US President Barack Obama in Washington DC on September 27.

The BJP said the Centre “was in a hurry” to offer “a gift” to a US company. The CPM alleged that the UPA government was succumbing to pressure from Washington.

The Centre, however, clarified that the proposed contract was meant “for a limited range of pre-project services.” “NPCIL will enter into this preliminary contract only with the approval of the AEC and the Government of India.

This contract, if approved, will not bind NPCIL to enter into a contract with Westinghouse for the supply of reactors without establishing safety and techno-commercial viability,” the Department of Atomic Energy (DAE) said in a statement on Thursday. 

The note got leaked on a day when a section of the media reported about an alleged bid by the Centre to dilute Section 17 of the Civil Liability for Nuclear Damage Act, which holds foreign suppliers liable for mishaps involving nuclear power plants due to “latent or patent” defects in the equipment.

The note sought the CCS’ approval for the $15.16-million deal between NPCIL and Westinghouse for preliminary licensing and site development works for the proposed nuclear power plant at Mithivirdi in Gujarat.

Westinghouse is in talks with NPCIL for supply of up to six 1,000-MWe nuclear reactors.
“It is proposed to sign the preliminary contract prior to the visit of the prime minister to the US in end-September 2013. Given the paucity of time, approval of the AEC cannot be sought. Instead, approval of the CCS is being solicited directly,” read the note.

“Given that complete viability analysis of the project is yet to be completed, NPCIL has proposed that the Government of India may fund the cost of the preliminary contract, as was done in the case of the Kudankulam nuclear power plant units I and II,” it added.

Attorney General G E Vahanvati reportedly said nuclear plant operators – NPCIL in case of the plant in Gujarat – are free to incorporate or discard provisions of Section 17 in their contract with the reactor suppliers.

Following Vahanvati’s remark, opposition parties said the Centre was trying to compromise the importance of the liability provision. 

The Centre said all contracts will be subject to the law. “The contracts, which will have to be approved by the competent authority of the government, will be fully consistent with the Indian law. There is no question of the Indian law being violated or diluted,” said the DAE.

“The projects will have to meet the highest standards of safety and the power generated will have to be competitive with other sources of nuclear as well as alternative forms of power. This will apply to our projects with Russia, France and the US.”