New Delhi looking at granting indemnity to US nuclear power suppliers

The government is likely to address the long pending issue of providing indemnification to American nuclear suppliers that has been one of the main sticking points in the progress of the US-India Civil Nuclear Deal.

The government is believed to have assured the US that it is keen to see progress in the negotiations on civil nuclear deal and hence it is “exploring ways” to find a solution that would “indemnify” American nuclear reactor suppliers against liability, sources told BusinessLine .

Sources said that both sides are going to hold a series of meetings in the next couple of months on the proposed construction of six Westinghouse AP1000 reactors in Andhra Pradesh, which was announced in 2016. The US-India Civil Nuclear Deal, which was concluded in 2008, has been stuck mainly on the issue of liability. However, India’s participation in the Convention on Supplementary Compensation for Nuclear Damage have helped matters and it may also put an end to the liability issue as India will now have to follow global rules laid out in the multilateral treaty, sources added.

Even though Toshiba-owned Westinghouse Electric Co. has gone into bankruptcy and Toshiba has announced its exit from the nuclear business, talks with Nuclear Power Corporation of India Ltd. (NPCIL) have been taking place, sources said.

Sources also added that indemnification is the only answer to the issue of liability that has prevented progress of the commercial talks.

The projects have also not been able to fructify because the insurance pool that suppliers need to participate has still not been formed.

“We need the indemnification to be able to move ahead. We expect the indemnification to happen. There may be a unique India form of it.

“But, we need the same structure that we have in the US, or in Europe, or in Korea or that allow us to participate and allow us to go forward. The same agreement we need here,” said Ed Monser, President and COO, Emerson Electric and Vice-Chairman, US-India Strategic Partnership Forum (USISPF).

Monser added that even though the issue of bankruptcy has proved to be a setback for the talks, the design of AP1000 nuclear reactors are still there and the US is participating in 12 AP1000 projects in China.

“The progress is slow. The companies went bankrupt, but it doesn’t mean they are eliminated or they are closed. It means reorganised.

“They did have some project failures or project overruns that generated the financial distress. But AP1000 design did not go away and the ability to do the AP1000 projects did not go away. And we are participating in 12 AP1000 projects in China.

“So, yes bankruptcy is a problem but this also means reorganised,” he said.

In April, Westinghouse Electric Company filed for bankruptcy.

However, in June, during the Prime Minister Narendra Modi’s meeting with US President Donald Trump, both sides agreed to expedite the signing of commercial agreements between Westinghouse Electric Company and NPCIL.

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