New Delhi (TIP)- “Plans are on to ease nuclear liability laws to cap accident-related penalties on equipment suppliers, in a move to attract U.S. firms that have been holding back owing to the risk of unlimited exposure,” three government sources said.
The proposal by Prime Minister Narendra Modi‘s government is the latest step to expand nuclear power production capacity by 12 times to 100 gigawatts by 2047 as well as provide a fillip in trade and tariff negotiations with the U.S.
“A draft law prepared by the Department of Atomic Energy (DAE) removes a key clause in the Civil Nuclear Liability Damage Act of 2010 that exposes suppliers to unlimited liability for accidents,” the sources said.
The DAE, the Prime Minister’s Office and the Finance Ministry did not respond to requests seeking comment.
“India needs nuclear power, which is clean and essential. A liability cap will allay the major concern of the suppliers of nuclear reactors,” Debasish Mishra, chief growth officer at Deloitte South Asia, said.
The amendments are in line with the international norms that put the onus on the operator to maintain safety instead of the supplier of nuclear reactors. The Union Government hopes that the changes will ease concerns of mainly U.S. firms such as General Electric Co. and Westinghouse Electric Co. that have been sitting on the sidelines for years owing to unlimited risks in case of accidents.
Analysts say passage of the amended law is crucial to negotiations between India and the U.S. for a trade deal this year that aims to raise bilateral trade to $500 billion by 2030 from $191 billion last year.
“Modi’s administration is confident of getting approval for the amendments in the monsoon session of Parliament, set to begin in July,” according to the sources.
Under the proposed amendments, the right of the operator to compensation from the supplier in case of an accident will be capped at the value of the contract. It will also be subject to a period to be specified in the contract.
Currently, the law does not define a limit to the amount of compensation an operator can seek from suppliers and the period for which the vendor can be held accountable.
The 2010 nuclear liability law grew out of the 1984 Bhopal gas disaster, the world’s deadliest industrial accident, at a factory owned by U.S. multinational Union Carbide Corp. in which more than 5,000 people were killed.
Source: Reuters