New Delhi: Days ahead of the Prime Minister’s visit to the US, a controversy erupted on Thursday over the move to sign a contract for setting up of a nuclear plant with an American company bypassing the atomic regulator even as the Department of Atomic Energy asserted that any contract signed will be fully consistent with Indian law.
DAE also said Nuclear Power Corporation of India Ltd (NPCIL), the Indian operator, will enter into a preliminary contract with America’s Westinghouse only with the approval of Atomic Energy Commission (AEC) and the government here. The statement by the DAE came after a note for Cabinet Committee on Security, suggesting bypassing the AEC, became public and also the reports that the proposed contract may not be in tune with the Indian nuclear liability law, evoking a sharp reaction from various political parties, including the BJP and the Left.
CCS was to consider the note in its meeting tomorrow. But the meeting has been rescheduled for September 24 and it was not clear whether the proposal will be part of the fresh agenda for Tuesday’s meeting. According to the note, there is a proposal to sign a ‘Preliminary Contract’ between NPCIL and Westinghouse Electric Company (WEC) to buy six 1000 MW nuclear reactors at a cost of USD 15.16 million for a power plant to be set up at Chayya-Mithivirdi in Gujarat.
The CCS note comes following an opinion rendered by Attorney General G E Vahanvati in which he is learnt to have said that it is up to the nuclear plant operator – in this case NPCIL – to invoke section 17 of the Civil Liability for Nuclear Disaster Act regarding liability of suppliers in case of a mishap. However, this was met with a sharp reaction from political parties with BJP saying reports of India compromising on crucial clauses in the Nuclear Liability Act regarding fixing of liability is “worrisome”.
It alleged that Prime Minister Manmohan Singh has allowed this to give a gift to American companies during his forthcoming visit to the US.
Warning that it would be an “illegal act” on part of the government if tried to dilute the liability act, Left parties said “it is evident that the UPA government is succumbing to the pressure of the US administration to safeguard their companies’ interests. But this cannot be at the expense of the interests of the country.” But the government sought to downplay the controversy saying there will be no dilution on the issue and the country’s interest will be protected. External Affairs Minister Salman Khurshid said while India needs energy, it will get it at its “own terms and conditions”.
Khurshid said the two sides have their own points of view, the discussions should result in a “win-win” situation for both the sides. Minister of State in Prime Minister’s Office V Narayanasamy said the government will go by the law passed by Parliament. “As far as nuclear liability is concerned, whatever the law laid down in our country, law passed by Parliament will prevail,” he said. The note said as there is a paucity of time, the AEC is not being approached for approval of the contract.
“It is proposed to sign the preliminary contract prior to the visit of the Prime Minister to the USA in end-September 2013. Given the paucity of time, the approval of the Atomic Energy Commission (AEC) cannot be sought. Instead, approval of the CCS is being solicited directly,” the note said. But in its statement, the DAE maintained that the NPCIL will enter into preliminary contract only with the approval of AEC and the Central government. “The proposed contract with Westinghouse is for a limited range of pre-project services. NPCIL will enter into this preliminary contract only with the approval of Atomic Energy Commission and the Government of India. This contract, if approved, will not bind NPCIL to enter into a contract with Westinghouse for the supply of reactors without establishing safety and techno-commercial viability,” the DAE said.
It also said the contracts, which will have to be approved by the competent authority of the government, will be fully consistent with Indian law.
“There is no question of Indian law being violated or diluted. The projects will have to meet the highest standards of safety and the power generated will have to be competitive with other sources of nuclear as well as alternative forms of power.
This will apply to our projects with Russia, France and the United States,” the DAE statement said. It said as foreign suppliers as well as domestic vendors have raised a number of queries regarding the manner in which the Civil Liability for Nuclear Damage Act 2010 and its associated rules will apply to their contracts, the department had sought a legal opinion on these issues. The opinion will be examined by the DAE and NPCIL, the statement said. While NPCIL’s negotiations with Russia’s ASE for further reactors at Kudankulam are at an advanced stage and preliminary agreement has been signed with Areva of France, NPCIL is currently negotiating a preliminary contract with Westinghouse.
Various reactor manufacturing companies, including those in the US, France and Russia, are not comfortable with the Indian Civil Liability for Nuclear Disaster Act, owing to huge financial liabilities for suppliers.
The law allows NPCIL to seek partial compensation from suppliers if their reactors are involved in a nuclear accident. Singh is travelling to the US from September 25 to 30 during which he will have a bilateral meeting with American President Barack Obama. (PTI)