Opposition remains strong against American business interests
Controversial legislation to establish monetary liability limits in case of a nuclear energy accident was introduced to the Indian parliament last week for the second time. Last March Prime Minister Manmohan Singh had to withdraw the bill due to strong opposition. The measure is a crucial element of an agreement with the U.S. to open Indian markets to U.S. firms.
If approved this time, the legislation would provide protection to suppliers against legal action if their equipment was involved in a nuclear accident in India. The bill would limit the liability of a nuclear power plant operator to 5 billion rupees or $110 million. Critics claim this figure is so low that it effectively exempts firms from any accountability.
U.S. firms maintain the bill is essential because unlike France’s Areva or Russia’s Rosatom, they don’t have sovereign immunity. With stockholders to protect, U.S. firms need to have liability limits especially if a local operator using their equipment causes the accident.
The Indian government does not command a majority in parliament. Opposition members from the Bharatiya Janata Party and the Communist Party claim they have the numbers to block the bill. Their focus of opposition is that passage would allow American firms to enter the Indian market. Their opposition is more of an ideological issue than anything else designed to thwart any agenda item of Singh’s majority party coalition.
Greenpeace is also in the picture urging Indian legislators to vote against the bill. The group issued a statement said it wants the designers of the plants to be held accountable even if the accident is the result of operator error. This position illustrates a more widespread political view of wanting to shift all liability regardless of fault to reactor vendors.
G.E. Hitachi plans Indian manufacturing center
Passage of liability limits would position G.E. Hitachi to carry out agreements it inked year with NPCIL and Bharat Heavy Industries to collaborate to build ABWR and ESBWR reactors. G.E. Hitachi also inked a nonexclusive deal to source large forgings from Larsen & Toubro which is building a facility that can handle steel forgings up to 600 tons. Once operational, it will compete head-to-head with a similar facility now operated by Japan Steel Works.
Westinghouse also has plans to build new reactors in India once the liability issue is resolved by the government. it has signed similar nonexclusive agreements with NPCIL and Indian heavy manufacturing firms.
India has plans to expand its current 4 GW of nuclear energy to 60 MW by 2030. Last December S.K. Jain, managing director of NPCIL, told the Economic Times the first five new reactor sites are being acquired and that construction will begin in 12-18 months.
As for the opposition to the liability bill during the first round, Jain reportedly said, “There will always be those who are never satisfied. It is a noisy democracy. I don’t see a major problem.”
One of the reasons members of parliament may find to support the bill is that is will create jobs and the electricity from the reactors will promote economic development. Like its competitor Westinghouse, G.E. Hitachi has agreed to “localize” manufacturing up to 70% of components creating thousands of jobs across India. The firm also has plans to establish a nuclear components manufacturing center to export nuclear technologies with the competitive factor being India’s lower labor costs.
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