Modi Administration Starts to Address Nuclear Energy Liability Law

Modi Administration Starts to Address Nuclear Energy Liability Law

The Indian government is working on plans to resolve the terms of the nuclear liability law that has staved off foreign and domestic equipment suppliers alike for it holds suppliers, and not just the operator, liable if an accident occurs.

The latest trigger for the government’s rethink is the unwillingness of even domestic firms to participate in the 2800 MW, $3.5 billion Gorakhpur Nuclear Power Project in the northern land-locked state of Haryana. India’s private players such Larsen & Toubro, and Walchandnagar Industries Limited, long standing nuclear equipment suppliers, have made no secret of their opposition to the liability law.

Government sources said Prime Minister Modi is understood to have asked his officials for an urgent solution to the problem which has all but neutered the landmark U.S.-India nuclear deal of 2008 because equipment suppliers aren’t willing to risk liabilities that could bankrupt them. When Prime Minister Modi visited Washington last September, the joint press release specifically mentioned finding a pathway to nuclear energy collaboration (and overcoming these obstacles). Westinghouse Electric and G.E. Power are eager to sell light water reactors to India.

Options the government is considering include: Setting up an insurance pool, fixing a limit on reactor components for the purpose of determining liability, and the Prime Minister providing a personal assurance that vendors won’t be harassed unnecessarily in the event of an accident.

The insurance pool is proposed to have all stakeholders, both operator and suppliers, contributing to the fund to cover high insurance costs. The size of the fund will depend  on the government’s own contribution, as state-owned Nuclear Power Corporation of India Ltd., is the sole operator of nuclear power plants in the country.


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