If and when the contract between India and the US becomes active it is expected to give a big push to the country’s nuclear power program

Nuclear Operator Liability Issue

It is related to the Indian liability rules under which the costs of an accident at the plant has to be shouldered by the operator and not the builder of the nuclear power station.

US-based Westinghouse has been negotiating to build reactors in India for more than a decade, however, as has been reported earlier by The Financial Express Newspaper, the project was stalled when the company had filed for bankruptcy in 2017.

The discussions between the two countries are about the Westinghouse’s building of six AP1000 reactors. Both countries in 2008 had signed a US-India civil nuclear agreement signed in 2008. This was followed by an agreement in 2016 for building the reactors.

India, in the meantime, according to sources had reached out to Japanese company Toshiba seeking help to resolve the issue of sale of nuclear reactors following the bankruptcy of its US-based Westinghouse Electric Company.

The techno-commercial negotiations of the deal are at an advanced stage and any further delay is expected to hit India’s target of tripling its nuclear-generating capacity in the next four years.

Progress So Far

A site in Gujarat to build a nuclear power station with a total capacity of 2,500 MW has already been allotted.

As has been reported earlier, sites have been identified for GE plants in Andhra Pradesh with an initial capacity of 3,200 MW.

Negotiations are stuck with US’ EXIM Bank for a loan of around $8-9 billion to part-fund the building of the reactors.

In the hope that the problems could be sorted fast, the two sides were negotiating the terms of the loan with EXIM Bank.

In 2015 the two countries had unveiled an insurance plan for nuclear plants. The focus of the plan to shield equipment suppliers from liability in the event of an accident.

More About The Insurance Plan

Based on the information available an insurance pool of Rs 1,500-crore ($226.16 million) insurance pool is likely to be created with participation from the GIC Re and four state-owned general insurance companies. Even the Centre is likely to be pitching in.

This could be bought by the suppliers and they are likely to recoup the cost by charging more for their services. Or most likely the NPCIL could take out insurance on behalf of these companies.