The debate on nuclear liability bill placed in Indian Parliament 2 weeks ago was heavy on political and rhetorical side and light on technical and commercial implications for the suppliers and the end users.
The suppliers are of course AREVA, Westinghouse, GE and Russians. While the companies from these countries must have tired all the ricks in the trade to convince the establishment (DAE and NPCIL ) to go along the international formulations that indemnify , once and for all, from third party seeking damages from India, it failed when the debates reached at the level of informed political discourse on the floor of Parliament. 18 amendments were accepted and the Minister for State Mr. Prithvi Raj Chauhan was almost pleading to the opposition parties led by BJP to give alternative formulations to get the Bill passed in time. Political overtones made it look like as if Government were in haste trying to please US President Barrack Obama, who will arrive by the November 2010 in Delhi, with a law passed by Parliament and ready with signatures of President of India.
So far as the end user is concerned, it would be Nuclear Power Corporation (NPC). It is now obligated on NPC to take out insurance, to promptly pay out to injured or persons killed from reactor accident, worth INR 1500 crores (about 300 Million USD). However NPC is at liberty to establish the reasons behind such an accident, should one ever happen, during its contemplated life time. If the reasons point out inherent, wilful or any other reasons for accident attributable to supplier, it would reach out for seeking damages as per the Nuclear Liability Bill passed by Indian law makers.
Though, the experts claim that power plants can operate safely for 40 years or even 60 years. How many years would NPC contract for life of the reactor supplied by GE/ Westinghouse/AREVA or Russians, one has no idea as of now. Will suppliers even agree to sign a contract where liabilities could be in force for 50 – 60 years or more after the commissioning of the nuclear power plant in India? What happens if the accident takes place in 25th year of its operation? Many companies that would have supplied the hardware might not exist for this long. Several companies are formed just as partnerships like with Bharat Forge, Larson & Toubro (L&T), BHEL etc to supply nuclear and conventional systems to NPC. These will have no history and will be required to exist till the liability is likely to remain in force from 6 – 8 decades after supplies took place? This is not going to happen and is not enforceable from commercial point of view. Evolution of business may require companies to merge or demerge or dissolve their operations. Suppliers with Nuclear Liability will also do so. GE -Hitachi, Westinghouse – Toshiba and AREVA are new joint ventures with history of less than one decade of existence. Will they or their ancillaries continue for another 80 years to satisfy nuclear obligations, I doubt it? The cost of maintaining such commercial liability is not understood by insurers or may be just too expensive to provide for.
How would one safeguard against nuclear accidents. The basis for safeguards include R&D, quality control and progressive knowledge and understanding of designing, constructing and operating nuclear power plants and hundreds of years of reactor operating experience accumulated all over the world. The track record of Nuclear Power plants the world over is good and possibility of accident in new types of plant designs is reduced to an irrelevant level. Since risk cannot be reduced to Zero, the Nuclear Liability Bill will involve insurance policies to be taken out by NPC and suppliers. The cost could deter most of the leading suppliers from signing contracts that would be legally binding in the way construed in India for many decades to come.
Let us talk about the complete absence of any Department of Atomic Energy (DAE) or Nuclear Power Corporation (NPC) expert explaining the nuances, intricacies and implications of the Nuclear Liability Bill to the common man by participating in Media led debates. There were only politicians on both sides and it was heavily tainted with political or ideological overtones. Left wanted no Nuclear Liability Bill at all and BJP was worried that without their strident criticism publicly voiced and amendments to the law made and credits claimed loudly, Congress will walk away with victory of the sorts. Under the circumstances it was obvious to business leaders that they would get a Bill that could defy commercial principles of transacting nuclear business in this country.
An independent and strong presence of respected Think Tank could have rescued the Bill from being hijacked by Political craftsmanship winning brownie points on the floor of the Parliament and in Media. Politicians would have free run and we have to now deal with the after effects of an untested, stand alone type Liability Bill. Once again in the international nuclear business we have pushed ourselves in a minority of one; twenty eight other countries do not have such clauses in their Bill.