Nuclear liability: No escape for foreign suppliers

Our Bureau New Delhi | Updated on January 22, 2018 Published on November 03, 2015


Foreign suppliers for nuclear power plants, including GE, Areva and Westinghouse, will not be exempt from liability in case of any accident under the Government’s proposed insurance structure for such plants.


However, the direction in which negotiations are heading might leave domestic suppliers such as L&T free from such liability.


“For Indian suppliers, the reactor and parts they provide will be to our specifications and designs. The safety of the design will be our responsibility. We will have to work the contract in such a way that the domestic supplier is not affected,” said Sekhar Basu, Chairman, Atomic Energy Commission, on the sidelines of the 7th Nuclear Energy Conclave organised by the India Energy Forum.


According to Basu, foreign suppliers such as GE, Areva, and others, will need to take insurance of ₹1,500 crore from their own insurance provider. The amount of the insurance is the same as that which will be taken by Nuclear Power Corporation of India Ltd (NPCIL). However, NPCIL will be able to access the India Nuclear Insurance Pool to be managed by public sector company General Insurance Corporation.


The Civil Liability for Nuclear Damage Act, provides right of recourse to NPCIL and allows it to sue suppliers in case of an accident.


Addressing the Nuclear Energy Conclave, Basu said, “The right to recourse is the only remaining hindrance to resolve the insurance issue. If we put it down in writing in the contracts itself, it can be resolved.”


Asked whether foreign insurance providers will be allowed to check the reactors of the foreign suppliers before approving the insurance, Basu said, “We have no issues if they inspect the reactors. The annual cost of taking such an insurance will only be ₹60-70 crore, which is negligible in projects of such scale.” 

Published on November 03, 2015
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